Private equity firm The Blackstone Group has confirmed reports that it has entered into an agreement to acquire Pinnacle Foods, a leading manufacturer of branded food products in the US and Canada.
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The purchase price totals approximately US$2.16bn, Blackstone confirmed. It was reported by just-food yesterday (12 February) that it is believed this includes the assumption of $900m in outstanding debt.
It is expected that a tender offer and consent solicitation will be made to repurchase Pinnacle Foods’ outstanding 8-1/4% Senior Subordinated Notes, due 2013, Blackstone revealed.
Generating annual gross sales of around $2.1bn, Pinnacle produces a number of consumer brands, including Duncan Hines baking mixes, Vlasic pickles, Hungry Man and Swanson frozen dinners, Log Cabin and Mrs. Buttersworth’s syrups, Armour canned meat, Lender’s bagels, Aunt Jemima breakfast foods, Celeste pizza and Van de Kamp’s and Mrs. Paul’s seafood.
The agreement will see the merger of an affiliate of Blackstone with Crunch Holding Corporation, the direct owner of Pinnacle.
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By GlobalDataFormer Kraft CEO Roger Deromedi has been appointed chairman of the group and will assume the responsibilities of this role upon completion. He succeeds C. Dean Metropoulos, who assembled and led the investor group that acquired Aurora Foods out of bankruptcy in March 2004, merged it with Pinnacle Foods, and oversaw the company’s return to profitability.
Commenting on his appointment, Deromedi hinted at the company’s plans for future growth. “I am pleased to be working with Blackstone and Pinnacle’s management team as they take the company on its next phase of growth, both through internal development and selective acquisitions,” he said.
Jeffrey Ansell will continue to serve as chief executive officer. “Pinnacle’s portfolio of well-known brands has deep heritage and a strong consumer following, and we look forward to building and strengthening our iconic brands,” he commented.
Additionally, Joe Jimenez, former Heinz EVP, will join the senior management team upon completion.
The transaction is subject to closing conditions and is expected to be completed in the first half of 2007.
