ConAgra Foods said it is increasing the resources it can place behind its core business through the sale of its Spicetec Flavors & Seasonings unit.
The US food group has struck a deal to sell Spicetec to Swiss seasonings group Givaudan for approximately US$340m.
ConAgra CEO Sean Connolly said the move would allow the comopany to focus on its core product portfolio of branded consumer goods sold in the US through retail channels. “We are committed to becoming a more focused and higher performing company in order to drive greater shareholder value. Divesting Spicetec is the latest action we have taken that will allow ConAgra Foods to invest resources into our core product portfolio to drive sustainable growth.”
Spicetec is a business-to-business manufacturer of seasonings and flavours. It operates two production facilities. One is a seasoning blends plant in Carol Stream, Illinois, where ConAgra produces patented “micron salt” and seasoning blends. The unit also has a flavours, seasoning blends and culinary bases plant in Cranbury, New Jersey, where it houses its research and development capabilities. BB&T Capital Markets estimates the business generates annual revenue of around $200m.
Connolly said Spicetec would continue to supply ConAgra.
Last year, ConAgra sold off its private label business to TreeHouse Foods for US$2.7bn. The company then announced plans to split its Lamb Weston and branded consumer businesses into two units.
ConAgra has since indicated it expects to grow its retail brands through a focus on quality and innovation. But, with the group only investing behind around 60% of its portfolio, speculation has mounted that further disposals could be on the cards as ConAgra invests behind the areas of the business it believes are best positioned for growth. Rumours that the Spicetec business could be on the block first surfaced in March this year.