ConAgra Foods to Sell Private Label Operations to TreeHouse Foods
November 02 2015 - 6:51AM
Business Wire
ConAgra Foods, Inc. (NYSE:CAG) today announced that it has
reached a definitive agreement to sell its private label operations
to TreeHouse Foods for approximately $2.7 billion in cash,
excluding transaction-related expenses.
Sean Connolly, president and chief executive officer, ConAgra
Foods, said, “The sale of our private label business marks another
important milestone as we remake ConAgra Foods into a focused,
higher-margin, more contemporary and higher-performing company.
This transaction will enable ConAgra to sharpen our focus and
resources on our Consumer Foods and Commercial Foods segments as we
continue to move quickly to drive sustainable growth and deliver
enhanced shareholder value.”
Mr. Connolly continued, “Today’s announcement follows a robust
sale process involving more than 35 potential buyers, including
both strategic buyers and financial sponsors. We are confident that
the private label business will be in good hands with TreeHouse
Foods, and better-positioned to reach its full potential as part of
a focused private label company.”
Under the terms of the agreement, ConAgra Foods will divest 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. ConAgra Foods will retain certain private label operations
with a strong connection to its existing Consumer Foods business,
specifically canned pasta, cooking spray, peanut butter,
pudding/gels, Gelit frozen pasta product offerings, as well as the
HK Anderson and Kangaroo brand equity, trademark and business
portfolios; the results for these operations, which were not
material, were moved to the Consumer Foods reporting segment in the
first quarter of fiscal 2016.
The Company expects to generate approximately $2.7 billion in
proceeds from the sale, less transaction expenses, and intends to
utilize the net proceeds primarily for debt reduction. Following
the transaction, the company expects to have a capital loss
carryforward of approximately $4.2 billion with an approximate tax
value of $1.6 billion, which can be used to offset potential future
capital gains over the next five years. ConAgra Foods will provide
details regarding the revised presentation of historical results
for its remaining reporting segments, as well as its use of
proceeds and long-term financial goals, in due course.
The transaction is subject to customary closing conditions and
regulatory clearances, and is expected to close in the first
quarter of calendar year 2016. 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 Foods
ConAgra Foods, Inc., (NYSE:CAG) is one of North
America's largest packaged food companies with branded
and private label food found in 99 percent of America’s
households, as well as a strong commercial foods business
serving restaurants and foodservice operations globally.
Consumers can find 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, along with food sold
by ConAgra Foods under private labels, in grocery,
convenience, mass merchandise, club and drug stores. Additionally,
ConAgra Foods supplies frozen potato and sweet potato products
as well as other vegetable, spice, and bakery products to
commercial and foodservice customers. ConAgra
Foods operates ReadySetEat.com, an interactive recipe
website that provides consumers with easy dinner recipes and
more. For more information, please visit us
at www.conagrafoods.com.
Note on Forward-looking Statements
This 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 execute an exit
option for its private label operations within the expected time
frame or at all; 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,
including product innovation, any pricing actions and 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;
ConAgra Foods’ ability to execute its operating and restructuring
plans and achieve operating efficiencies; the success of ConAgra
Foods’ cost-saving initiatives, 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151102005778/en/
ConAgra Foods, Inc.MEDIA:Jon Harris,
630-857-1440jon.harris@conagrafoods.comorINVESTORS:Chris
Klinefelter, 402-240-4154Chris.Klinefelter@ConAgraFoods.com
ConAgra Brands (NYSE:CAG)
Historical Stock Chart
From Mar 2024 to Apr 2024
ConAgra Brands (NYSE:CAG)
Historical Stock Chart
From Apr 2023 to Apr 2024