Borden Foods Corporation yesterday announced that it has reached a definitive agreement to sell two key businesses within the Borden Foods portfolio to the H.J. Heinz Company (NYSE:HNZ).
The Borden Foods pasta sauce and soup and bouillon businesses in the U.S., Canada and internationally are being acquired by Heinz, headquartered in Pittsburgh, Pennsylvania. The transaction includes production facilities in Pennsauken, New Jersey, and Northbrook, Illinois. Aggregate annual sales are approximately $270 million.
Go deeper with GlobalData
“This transaction includes valuable brand names that are leaders in their marketplaces,” said C. Robert Kidder, Chairman, Borden Foods, and also Chairman and Chief Executive Officer of its affiliate, Borden, Inc. “The sale of these businesses is linked in part to the progress Borden Foods has made in strengthening them. The management team has successfully improved the profitability of the company’s core businesses (pasta, sauce and bouillon) by over $30 million in the last three years. The pasta sauce business has grown rapidly and increased brand profitability each of the past two years. The sale of these businesses to Heinz will further strengthen a portfolio of growing brands with global importance.”
H.J. Heinz will be acquiring Borden Foods’ strong U.S. and Canadian position in pasta sauce, with brands including Classico® in the U.S. and Canada, Aunt Millie’s® in the U.S. and Catelli®, Bravo® and Gattuso in Canada.
Classico is the best-selling premium sauce in both the U.S. and Canada with an ever-expanding family of flavors that each captures the essence of a unique Italian region. Catelli is a strong sauce brand in the Canadian market second only to Classico. The pasta sauces are produced at the Pennsauken plant and in Montreal, Quebec. Borden Foods has entered into a renewable co-packing agreement with Heinz to continue producing sauces in Montreal for a certain period of time.
The soup and bouillon business consists of Wyler’s® bouillon, Wyler’s Soup Starter®, Wyler’s Shakers(TM) instant bouillon and seasoning in the U.S. and Catelli Shakers(TM) in Canada, and Mrs. Grass® recipe soup mixes. All are manufactured at the Northbrook plant.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataTerms of the transaction were not revealed. The transaction is subject to customary closing conditions and is expected to be completed within the next one to three months. Goldman, Sachs & Co., an investment banking firm, is acting as financial advisor to Borden Foods.
Approximately 350 Borden Foods associates will be offered positions with Heinz. This includes the majority of associates at the Pennsauken and Northbrook plants and a limited number of associates directly involved with the brands both in the U.S. and Canada.
Borden Foods currently plans to run the portions of its business not included in this transaction (or the one announced earlier this week involving a portion of the company’s U.S. pasta business), while continuing to engage in discussions regarding strategic alternatives for the remaining businesses.
Borden Foods Corporation is an affiliate of Borden, Inc. Both are privately owned by the investment firm Kohlberg Kravis Roberts & Co. and headquartered in Columbus, Ohio.
