Chicago, Illinois, U.S.A.-based food manufacturer Conagra Brands is buying Pinnacle Foods, the maker of Mrs. Paul’s, Van de Camp’s, and other popular food brands, for USD 10.9 billion (EUR 9.4 billion).
Conagra had reportedly been considering the deal since April 2018, after investment fund Jana Capital Partners bought a 9.5 percent stake in Pinnacle.
The acquisition will enhance Conagra Brands' multi-year transformation plan and expand its presence and capabilities in its most strategic categories, including frozen foods and snacks, according to a joint press release.
Pinnacle Foods, which had net sales in excess of USD 3 billion (EUR 2.6 billion) in 2017, also manufacturers well-known brands such as as Birds Eye, Duncan Hines, Earth Balance, Glutino, and Wish-Bone. Conagra makes leading brands such as Marie Callender’s, Healthy Choice, and Slim Jim.
The combination of the two companies will allow both to better capitalize on trends in frozen foods by bringing together “complementary portfolios in the large, growing and on-trend frozen foods category, positioning the combined company to accelerate innovation and benefit from long-term tailwinds,” Pinnacle and Conagra said.
"After three years of transformative work to create a pure-play, branded food company, we are well-positioned to accelerate the next wave of change," said Sean Connolly, president and chief executive officer of Conagra Brands. "The addition of Pinnacle Foods' leading brands in the attractive frozen foods and snacks categories will create a tremendous opportunity for us to further leverage our proven innovation approach, brand-building capabilities, and deep customer relationships.”
"Today's transaction provides Pinnacle Foods shareholders with substantial and immediate value, as well as the opportunity to participate in the significant upside potential of the combined company," Pinnacle Foods CEO Mark Clouse said. Pinnacle's total shareholder return is approximately 275 percent since its IPO, he added.
Conagra expects to achieve approximately USD 215 million (EUR 185 million) in annual run-rate cost synergies by the end of fiscal year 2022, with one-time cash costs to achieve the synergies estimated at approximately USD 355 million (EUR 306 million), inclusive of expected capital expenditures of approximately USD 150 million (EUR 129 million).
