TreeHouse acquires soups, broth maker

TreeHouse acquires soups, broth maker

TreeHouse Foods has struck a deal to acquire Protenergy Natural Foods from private-equity firms Whitecastle Investments and Whitecap Venture Partners for C$170m (US$150m).

Protenergy makes private-label and branded broths, soups and gravies. The company also acts as a co-manufacturer for national brands. TreeHouse said the business was at the "forefront" of the "evolution of carton and recart broth". The deal includes two manufacturing facilities.

The company generated sales of around C$130m in the 12 months to the end of December.

TreeHouse said the transaction is expected to close in the back half of this year. The group anticipates the integration of Protenergy's results will add $0.05-0.07 to earnings per share this year and $0.11-0.15 in 2015, its first full year of inclusion in TreeHouse's results. The deal will be funded through TreeHouse's existing credit facilities.

TreeHouse chairman, president and CEO Sam Reed said: "The acquisition of Protenergy is expected to expand our existing packaging capabilities and enables us to offer customers a full range of soup products, both wet and dry. The addition of Protenergy is also expected to leverage our R&D capabilities in the evolution of shelf stable liquids from cans to cartons. Lastly, we believe Protenergy's packaging applications present meaningful growth opportunities in the categories that we already play in today, as well as closely adjacent food and beverage categories."

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TreeHouse Foods to Acquire Protenergy Natural Foods for CAD $170 Million in Cash from Whitecastle Investments Limited, Whitecap Venture Partners and Others

-- Increases annual revenue by approximately $200 million

-- Estimated EPS accretion of $0.11 - $0.14 in first full year following closing

-- Positions TreeHouse at the forefront of evolution from cans to carton packaging (aseptic and recart) for broth, soup, sauces and other shelf stable liquids

-- Presents growth opportunities into closely adjacent food and beverage categories

OAKBROOK, Ill., April 21, 2014 /PRNewswire/ -- TreeHouse Foods, Inc. (NYSE: THS) today announced that it will acquire Protenergy Natural Foods, an industry leading developer and manufacturer of premium quality food and beverage products, namely private label broth, soups and gravies.  TreeHouse has agreed to pay Whitecastle Investments Limited, Whitecap Venture Partners and others CAD $170 million (approximately US $150 million) in cash for the business, subject to an adjustment for working capital. 

The Company expects the transaction to have approximately $0.05 to $0.07 EPS impact on 2014 earnings and add approximately $0.11 to $0.14 in EPS in 2015.  The transaction is expected to close late in the second quarter of 2014, subject to the satisfaction of customary closing conditions, and will be financed through borrowings under TreeHouse's existing credit facility.

Protenergy Natural Foods is at the forefront of the evolution of carton and recart broth, soups and gravies, both for private label and corporate brands, and also serves as a co-manufacturer of national brands.  With approximately 300 employees, Protenergy is headquartered in Richmond Hill, Ontario, Canada and operates a second production facility in Cambridge, Maryland.  Protenergy had 2013 sales of approximately CAD $130 million for the twelve months endedDecember 31, 2013.  Following the acquisition, TreeHouse anticipates pro forma 2014 sales of approximately $2.7 billion and adjusted EBITDA of approximately $385 million. 

"We are delighted to welcome Protenergy Natural Foods and its innovative capabilities in premium food and beverage products to the TreeHouse family," said Sam K. Reed, Chairman, President and Chief Executive Officer of TreeHouse Foods.  "The acquisition of Protenergy is expected to expand our existing packaging capabilities and enables us to offer customers a full range of soup products, both wet and dry.  The addition of Protenergy is also expected to leverage our R&D capabilities in the evolution of shelf stable liquids from cans to cartons. Lastly, we believe Protenergy's packaging applications present meaningful growth opportunities in the categories that we already play in today, as well as closely adjacent food and beverage categories."

"We are pleased to be joining TreeHouse Foods," said Kevin Tracey, Chief Executive Officer of Protenergy Natural Foods.  "We have an experienced and highly capable management team, and we are focused on delivering innovative product formulation, and exceptional processing and product quality to our customers.  We see significant opportunities for innovation and growth in Tetra Recart packaging by leveraging the strengths of our two companies."

"We are proud to have assisted Protenergy in its growth from start up in 2004 to its acquisition by TreeHouse Foods," said Blaine Hobson, Managing Director of Whitecap.  "This acquisition represents an outstanding divestiture for our shareholders and investors to a strategic buyer with the potential to unlock the huge potential still remaining in Protenergy."

Barclays is acting as financial advisor on the transaction and Winston & Strawn LLP and Stikeman Elliott LLP are serving as legal counsel to TreeHouse.  William Blair is serving as financial advisor to Protenergy and Whitecastle with respect to the transaction, and Goodmans LLP is serving as legal counsel to Protenergy and Whitecastle.

CONFERENCE CALL WEBCAST

A webcast to discuss the Company's acquisition of Protenergy will be held at 9:00 a.m. (Eastern Time) today and may be accessed by visiting the "Investor Overview" page through the "Investor Relations" menu of the Company's website athttp://www.treehousefoods.com.

ABOUT TREEHOUSE FOODS

TreeHouse is a food manufacturer servicing primarily the retail grocery and foodservice channels.  Its major product lines include non-dairy powdered creamer and sweeteners; condensed, ready to serve and powdered soups; refrigerated and shelf stable salad dressings and sauces; powdered drink mixes; single serve hot beverages; specialty teas; hot and cold cereals; macaroni and cheese, skillet dinners and other value-added side dishes and salads; salsa and Mexican sauces; jams and pie fillings under the E.D. Smith brand name; pickles and related products; and other food products including aseptic sauces and liquid non-dairy creamer.  TreeHouse believes it is the largest manufacturer of pickles and non-dairy powdered creamer in the United States and the largest manufacturer of private label salad dressings, powdered drink mixes and instant hot cereals in the United States and Canada based on sales volume.

Additional information, including TreeHouse's most recent statements on Forms 10-Q and 10-K, may be found at TreeHouse Foods' website,http://www.treehousefoods.com.

Original source: TreeHouse Foods