TreeHouse Foods facility in Brantford. Credit: TreeHouse Foods’ image library

US private-label heavyweight TreeHouse Foods is reported to be in exclusive talks to sell its meal preparation unit to private-equity firm Investindustrial.

New agency Bloomberg, quoting unnamed sources familiar with the situation, said if a deal is agreed it may value the TreeHouse Foods unit at about US$1.3bn, including debt.

TreeHouse Foods’ meal-prep business houses dressings, sauces, pickles, dips and salsa, creamers, dough and pasta.

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The firm announced last November it was looking at “strategic alternatives” that could include “a possible sale of the company or a transaction to allow the company to focus on its higher growth snacking and beverages business by divesting a significant portion of its meal-prep business”.

In March this year, TreeHouse Foods ruled out a sale of the whole company but reiterated that it was reshaping its business around “higher growth, higher margin” snacking and beverage operations in a “group of categories”.

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It added then that disposal options for the meal preparation division were being considered “either in a single transaction or in a series of transactions”.

In April, meanhwile, TreeHouse Foods reached an agreement with Jana Partners that saw the activist investor get a seat on its board.

Jana took a 7.3% stake in TreeHouse Foods early last year as it sought to evaluate “avenues to resolve the issuer’s undervaluation and total stockholder return”, including a potential sale of the company. The pressure arose despite a strategy under president and CEO Steven Oakland entailing asset disposals and acquisitions and slashing SKUs to boost profit margins.

When contacted by Just Food, a spokesperson for London-based Investindustrial said it has no comment to make on the Bloomberg story.

TreeHouse said; “We do not comment on rumours or market speculation.”