ConAgra Foods Completes Sale of Private Label Operations to TreeHouse Foods
February 01 2016 - 4:05PM
Business Wire
ConAgra Foods, Inc. (NYSE:CAG) announced today the completion of
the sale of its private label operations to TreeHouse Foods for
proceeds of $2.7 billion in cash, excluding transaction-related
expenses and subject to post-closing adjustments.
“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 ConAgra Foods.
“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.”
Under the terms of the agreement, ConAgra Foods sold the vast
majority of its private label operations, which are classified as
discontinued operations. Among other assets, this includes a
network of 32 manufacturing facilities in the U.S., Canada and
Italy.
Additional details of the completed transaction include:
- Effective today, a total of
approximately 9,500 employees transitioned to TreeHouse Foods,
including plant employees and those supporting the private label
business located at the St. Louis, Mo., Downers Grove, Ill., and
Omaha, Neb., office locations.
- Certain private label operations with a
strong connection to ConAgra Foods’ existing Consumer Foods
business were not part of the sale, specifically canned pasta,
cooking spray, peanut butter, pudding/gels, Gelit frozen pasta
product offerings, 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.
- ConAgra Foods generated approximately
$2.7 billion in cash proceeds from the sale, less transaction
expenses, and intends to utilize the net proceeds primarily for
debt reduction.
- The company expects the transaction to
result in a tax asset of approximately $1.6 billion, which can be
used to offset potential future capital gains over the next five
years.
Goldman Sachs and Centerview Partners acted as financial
advisors to ConAgra Foods on the transaction. Davis Polk &
Wardwell LLP served as legal advisor.
About ConAgra FoodsConAgra Foods, Inc., (NYSE: CAG), is
one of North America's leading packaged food companies with
recognized brands such as Marie Callender's®, Healthy Choice®,
Slim Jim®, Hebrew National®, Orville Redenbacher's®, Peter
Pan®, Reddi-wip®, PAM®, Snack Pack®, Banquet®, Chef Boyardee®, Egg
Beaters®, Hunt’s® and many other ConAgra Foods brands found in
grocery, convenience, mass merchandise and club stores. ConAgra
Foods 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. For
more information, please visit us at www.conagrafoods.com.
Note on Forward-looking StatementsThis press release
contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based on management’s current
expectations and are subject to uncertainty and changes in
circumstances. These risks and uncertainties include, among other
things: ConAgra Foods’ ability to successfully complete the spinoff
of its Lamb Weston business on a tax-free basis within the expected
time frame or at all; ConAgra Foods’ ability to execute its
operating and restructuring plans and achieve its targeted
operating efficiencies, cost-saving initiatives, and trade
optimization programs; ConAgra Foods’ ability to successfully
execute its long-term value creation strategy; ConAgra Foods’
ability to realize the synergies and benefits contemplated by the
Ardent Mills joint venture; risks and uncertainties associated with
intangible assets, including any future goodwill or intangible
assets impairment charges; the availability and prices of raw
materials, including any negative effects caused by inflation or
weather conditions; the effectiveness of ConAgra Foods’ product
pricing efforts, whether through pricing actions or changes in
promotional strategies; the ultimate outcome of litigation,
including litigation related to the lead paint and pigment matters;
future economic circumstances; industry conditions; the
effectiveness of ConAgra Foods’ hedging activities, including
volatility in commodities that could negatively impact ConAgra
Foods’ derivative positions and, in turn, ConAgra Foods’ earnings;
the success of ConAgra Foods’ innovation and marketing investments;
the competitive environment and related market conditions; the
ultimate impact of any ConAgra Foods’ product recalls; access to
capital; actions of governments and regulatory factors affecting
ConAgra Foods’ businesses, including the Patient Protection and
Affordable Care Act; the amount and timing of repurchases of
ConAgra Foods’ common stock and debt, if any; the costs, disruption
and diversion of management’s attention associated with campaigns
commenced by activist investors; and other risks described in
ConAgra Foods’ reports filed with the Securities and Exchange
Commission, including its most recent annual report on Form 10-K
and subsequent reports on Forms 10-Q and 8-K. Investors and
security holders are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date they
are made. ConAgra Foods disclaims any obligation to update or
revise statements contained in this press release to reflect future
events or circumstances or otherwise.
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version on businesswire.com: http://www.businesswire.com/news/home/20160201006282/en/
ConAgra Foods, Inc.Media:Jon Harris,
630-857-1440jon.harris@conagrafoods.comorInvestors:Chris
Klinefelter, 402-240-4154Chris.Klinefelter@ConAgraFoods.com
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