TreeHouse Foods has announced that it has completed its acquisition of Canadian private-label sauces and dressing specialist ED Smith (EDS).
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TreeHouse, which is the largest producer of pickles in the US, announced its move to acquire all of the operating assets of the ED Smith Income Fund in June, agreeing to pay C$220m for the company, and assume some $100m in net debt and transaction costs.
ED Smith is a leading supplier of private-label salad dressings in both Canada and the US, and also markets ED Smith brand jams, jellies and pie fillings, as well as other private-label products in Canada.
The all-cash deal is being financed through borrowings under the TreeHouse’s existing US$600m credit facility.
“ED Smith opens access to both new geography and new product categories”, said chairman and CEO Sam K. Reed. “The name ‘ED Smith’ is renowned in the world of private-label foods where its reputation sets the standard in strategic alignment and cooperation with grocery customers. We will benefit greatly on both sides of the border from EDS, not only in opening markets, but also in extending our scope as an industry leader.”
TreeHouse has said that ED Smith is expected to contribute approximately $0.07 per share on an annualised basis but will only contribute $0.01 per share of operating earnings in the fourth quarter of 2007 based on the closing date of the transaction.
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