TreeHouse Foods plans to offer US$400m of senior unsecured notes in an underwritten public offering to fund its recent acquisition of Sturm Foods.
The US private-label group expects to close the acquisition of Sturm next month and said today (16 February) that a portion of the proceeds from the offering will be used to fund the deal.
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The offering for the notes, which are due in 2018, will close at the same time as the acquisition of Sturm. TreeHouse intends to finance the remaining portion of the acquisition through a draw-down on its existing credit facility as well as an underwritten public offering of common stock.
The US private-label food maker earlier this month called 2010 “a year of opportunity” for the business and forecast strong growth for own label. The company, which makes soups, jams, spreads and sauces for US retailers, predicted that private-labels volumes would “outpace” the overall grocery sector in the country.
TreeHouse struck the deal to buy Sturm before Christmas. The group has already forecast that Sturm will add up to US$0.30 to earnings per share in 2010 – and up to $0.40 on a pro-forma basis across a full year.
At the time, TreeHouse said fourth-quarter net income had more than tripled in 2009 from $6.8m to $22.1m. Net sales climbed 1.7% in the quarter to $404.8m as growth in the retail channel was dampened by lower industrial and export revenues.
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