TreeHouse Foods has offloaded its snack-bar business to US peer John B. Sanfilippo & Son.
In a deal worth approximately $63m in cash, TreeHouse has sold a factory in Lakeville, Minnesota that produces private-label snack bars.
“The sale of our Lakeville facility and snack bars business is another example of our strategy in action to be a focused private label leader in high-growth and high-margin categories,” TreeHouse CEO Steve Oakland said.
In a separate statement, John B. Sanfilippo & Son said the deal “significantly accelerates our strategy within the growing snack bar category”.
In the last 18 months, TreeHouse has been looking to reshape its business to focus on more profitable product categories.
In August last year, the company sold a “significant portion” of its meal preparation business to European investment group Investindustrial for US$950m.
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TreeHouse said the snack-bar business was “not expected to contribute positive adjusted EBITDA in fiscal year 2023”.
In May, the company acquired a “small vendor” of private-label pretzels with a $14m buy-out to keep up with consumer demand.
In February this year, TreeHouse said it would consider making acquisitions to add capacity amid an increase in consumer demand. The company revealed it had made a profit in Q4 of 2022 but said it has been unable to meet “robust” demand from cash-strapped consumers trading down from higher-priced branded products.
For its part, John B. Sanfilippo & Son said the deal would add around $105-120m in net sales to its business in its 2024 financial year.
“We will be able to offer our private label customers a complete portfolio of snack bars, including fruit and grain, crunchy, protein, sweet and salty and chewy bars that complement our internally developed nutrition bars,” CEO Jeffrey Sanfilippo said.
“(…) We will focus on our core operational competencies in the snack foods space, our consumer insights and history of innovative research and development to maximise its performance.”