WESTCHESTER, Ill., Sept. 13 — TreeHouse Foods, Inc. (NYSE: THS) today announced that it has entered into a definitive agreement to acquire S.T. Specialty Foods, a portfolio company of Windjammer Capital Investors. The Brooklyn Park, MN based maker of private label macaroni and cheese, skillet dinners and other value-added side dishes and salads sells primarily to the North American retail grocery segment and has sales of approximately $100 million.
TreeHouse has agreed to pay $180 million in cash for the business, subject to certain closing and post-closing adjustments, plus up to an additional $15 million in cash if the company achieves certain earnings targets for the 12 month period ending December 31, 2010. The acquisition will be financed through borrowings under TreeHouse's existing $600 million credit facility. The transaction will be neutral to the Company's earnings over the balance of 2010, but is expected to add between $0.11 and $0.13 per share to earnings on an annualized basis. The acquisition is expected to close in October, subject to regulatory approvals and the satisfaction of customary closing conditions.
"We are delighted to acquire a business that expands our portfolio with the leading private label manufacturer of macaroni and cheese and skillet dinners," commented Sam K. Reed, Chairman and Chief Executive Officer. "S.T. has had consistent growth since its inception and will not only add to our broad product portfolio for the retail grocery channel, but it will also give us the opportunity to expand our offerings into the lunch and dinner meal occasions."
"The acquisition will align us with one of the fastest growing food companies in North America," said Dale Schulz, President of S.T. Specialty Foods. "We believe TreeHouse is an excellent fit with not only our products, but also with the culture we have established here at S.T."
"During our partnership with S.T., the company has successfully executed upon initiatives that have it well-positioned for continued success," said Greg Bondick, a Managing Director in Windjammer's Boston office. "We have tremendous respect for the organization that Dale Schulz and Ray Turcotte have built and it has been our great pleasure to be part of the S.T. family for the last two years. We have faith that S.T.'s success will continue under TreeHouse ownership."
S.T. Specialty Foods has manufacturing and distribution facilities in Brooklyn Park, MN and Kenosha, WI. TreeHouse does not anticipate making any significant changes to S.T.'s existing operations.
William Blair & Company, L.L.C. acted as financial advisor to TreeHouse in connection with the transaction, and Winston & Strawn LLP provided legal counsel. S.T. Specialty Foods was advised by Houlihan Lokey Howard & Zukin Capital, Inc. and the law firm of Choate, Hall & Stewart LLP.
Source: TreeHouse Foods Inc.
