ConAgra Private Label Sale Excludes Gelit Frozen Pasta
ConAgra Foods, Inc. has completed the sale of its private label assets to TreeHouse Foods for $2.7 billion in cash, excluding transaction-related expenses. The deal, subject to post-closing adjustments, includes a network of 32 manufacturing facilities in the United States, Canada and Italy.
Certain private label operations with a strong connection to ConAgra’s existing Consumer Foods business were not part of the sale, specifically Gelit frozen pasta product offerings, canned pasta, cooking spray, peanut butter and pudding/gels, as well as the HK Anderson and Kangaroo brand equities, trademarks and business portfolios. Results for these operations, which were not material, were moved to the Consumer Foods reporting segment in the first quarter of fiscal 2016.
Net proceeds from the sale, less transaction expenses, will be utilized primarily for debt reduction. The expectation is for a tax asset of approximately $1.6 billion, which can be used to offset potential future capital gains over the next five years.
“The sale of the private label business to TreeHouse Foods is another important step for ConAgra Foods, as we continue to transform the company to drive sustainable growth, more consistent performance and deliver enhanced shareholder value,” said Sean Connolly, president and chief executive officer of the Omaha, Nebraska, USA-headquartered company. “We are confident the private label business will be well-positioned as part of TreeHouse Foods, and our companies are working closely together to ensure a smooth transition for all stakeholders.”
As of February 1, approximately 9,500 employees transitioned to the payroll of Oakbrook, Illinois-headquartered TreeHouse Foods. Included were plant workers and those supporting the private label business located at the St. Louis, Missouri; Downers Grove, Illinois; and Omaha office locations.
The acquisition by TreeHouse significantly expands its scope in the dry and refrigerated grocery sector, boosting the company’s pro formal sales to approximately $7 billion for the 12-month period ending on December 31, 2015. The new operation, doing business as TreeHouse Private Brands, is part of group consisting of over 16,000 employees and more than 50 manufacturing facilities.
About ConAgra Foods
Ranked as one of North America's leading packaged food companies, ConAgra Foods manufactures a wide range of products for multiple market segments. Among its retail brands in the frozen sector are Marie Callender’s, Healthy Choice and Banquet. It also has a strong business-to-business presence, supplying frozen potato and sweet potato products as well as other vegetable, spice and grain products to a variety of well-known restaurants, foodservice operators and commercial customers.