TreeHouse Foods, the US private-label food group, has lifted its earnings forecast for 2009 - on the same day the company announced the US$660m acquisition of Sturm Foods.

The company increased its full-year earnings per share guidance from a range of $2.07 to $2.09 of adjusted earnings per share to $2.10 to $2.12 - excluding one-time items and any costs associated with the Sturm transaction.

"We continue to generate excellent top-line growth and benefit from our cost savings programmes in the fourth quarter," said chairman and CEO Sam Reed. "Our results demonstrate that grocery customers and consumers are committed to the proposition of high-quality private-label products at value prices."

The $660m deal, expected to be sealed by the end of March, expands TreeHouse's presence in the US private-label sector.

The purchase will be financed by a combination of $400m in new debt, around $100m in equity stock issuance, and the balance funded from borrowings under TreeHouse's existing revolving credit facility.

Reed said he expects TreeHouse's earnings per share to climb again in 2010. "Looking ahead to 2010 and excluding the impact of the Sturm transaction, we expect EPS to grow 9-13% to $2.32 to $2.37, which includes $3m in incremental IT costs associated with our ERP project," Reed said.

"Taking into account the timing for closing the acquisition, we expect Sturm to add another $0.27 to $0.30 in EPS in 2010. On a full-year basis, we expect Sturm to contribute $0.38 to $0.40 in earnings, resulting in over 16% accretion.

"Not only does this combination represent a strong strategic fit - excellent category dynamics, a profitable business and good people - but financially, the deal is extremely rewarding for our shareholders."