On the money: TreeHouse eyes M&A opportunities
TreeHouse said M&A is currently undergoing a “revival” in food and the beverage sector
TreeHouse Foods said it is ready to pursue further merger and acquisition opportunities after posting an increase in first-half profits.
The company this morning (5 August) recorded net profits of US$38m compared to $31m in the prior year period.
Operating profits rose to $72m from $55m last year, while sales reached $843m from $728m in the prior year, driven by the acquisition of Sturm Foods.
Speaking on the firm’s earnings call today, Sam Reed, chairman and CEO, said that M&A is currently undergoing a “revival” in the food and beverage sector.
“Within a few short months of our Sterm acquisition, others have since followed suit with similar mid-sized deals in the dried pasta, fruit juice, salty snacks and over the counter products,” Reed said.
“We are in great condition to pursue another round of strategic expansion opportunities,” he added. “Total debt is only marginally above three times cash flow and our internal forecasts can easily accommodate another $200m plus or minus deal before the year’s end. The Sterm management team has bolstered our acquisition and integration resources…and credit market conditions should remain favourable as we undertake refinancing of our $600m revolver.
“As the major players return to the field both the game itself and the conditions favour our TreeHouse team,” Reed said.
Looking forward, the firm upped its 2010 guidance from $2.65 to $2.70 in adjusted earnings per share, to $2.70 to $2.75.
Companies: TreeHouse Foods
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