Pinnacle Foods Finance has inked a deal to acquire Birds Eye Foods in the US in a transaction valued at US$1.3bn.
Birds Eye Foods, a holding company controlled by Vestar Capital Partners, Pro-Fac Cooperative and Birds Eye management, sells frozen vegetables and meals throughout the US.
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Pinnacle CEO Bob Gamgort said the “compelling” combination would create a market-leading player in both the frozen and shelf-stable categories.
“The Birds Eye brand has $640m in net sales in the US and strong health and nutrition credentials, along with proven extendibility into new segments and occasions. The transaction provides meaningful opportunities to create value and strengthens our financial position,” he said.
Pinnacle Foods, owned by private-equity funds controlled by The Blackstone Group, makes brands including Swanson and Hungry-Man frozen dinners and entrees, Van de Kamp’s and Mrs Paul’s frozen seafood, Aunt Jemima frozen breakfasts and Celeste frozen pizzas.
Pinnacle said the transaction would be financed by new debt financing as well as a “significant” new equity investment from Blackstone.
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By GlobalData“Birds Eye adds another market-leading brand to the Pinnacle Foods platform and creates an attractive, diversified food company with significant scale,” said Prakash Melwani, senior managing director of Blackstone.
The deal is expected to close in the first quarter of next year.
The preciously announced Birds Eye IPO will be withdrawn, the company said.
Birds Eye Foods generates annual sales of more than $930m, with its brands including Birds Eye, Birds Eye Steamfresh, and Birds Eye Voila!
Other manufacturers hold the trademarks elsewhere around the world. In the UK, Birds Eye Iglo is owned by private-equity firm Permira.
