TreeHouse Foods expands pasta portfolio with acquisition of leading brands from Riviana Foods

USA – TreeHouse Foods, a leading manufacturer and distributor of private label packaged foods and beverages in North America is seeking to acquire majority of the U.S. branded pasta portfolio of Riviana Foods for US$242.5 million.

In an all cash transaction, the acquisition will include well-known brands by the subsidiary of Spanish food giant Ebro Foods, such as Skinner, No Yolks, American Beauty, Creamette, San Giorgio, Prince, Light ‘n Fluffy, Mrs. Weiss’, Wacky Mac, P&R Procino-Rossi and New Mill.

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“The acquisition of Ebro’s well-known regional pasta brands further strengthens our portfolio and expands our scale to better serve our national and regional customers.”

Steve Oakland – CEO and President of TreeHouse Foods

In addition, Riviana Foods’ St. Louis manufacturing facility, which employs around 90 people, will be included in the transaction.

However, Riviana Foods will retain the Ronzoni national brand, as well as its manufacturing plants in Winchester, Virginia; and Fresno, California.

“The acquisition of Ebro’s well-known regional pasta brands further strengthens our portfolio and expands our scale to better serve our national and regional customers,” said Steve Oakland, CEO and President of TreeHouse Foods.

“Our existing private label and regional brand pasta business will be a natural complement to the acquired brands and will enable us to further optimize our production network, improve capacity utilization and deliver greater profitability and free cash flow,” he added.

According to TreeHouse, the business in consideration generated revenue of approximately US$200 million for the twelve-month period ended June 30, 2020.

The food processor expects the acquisition will be accretive by 20¢ to 30¢ per share in the first full year after closing.

“We are confident this accretive acquisition, along with the significant progress we have made in generating free cash flow this year, will enhance our ability to drive shareholder value,” highlighted Steve.

The company has recently announced that its third quarter 2020 adjusted earnings per diluted share from continuing operations was US$0.71 compared to US$0.55 for the same period in 2019, representing an increase of 29%.

The transaction is subject to Hart-Scott Rodino review and other customary closing conditions and is expected to close in the fourth quarter of 2020.

Evercore is acting financial advisor to TreeHouse Foods on the transaction and Winston & Strawn LLP is serving as legal counsel to the Company.

This is the first acquisition for the private label manufacturer in a while, following years of cost-cutting, office closures, divestments and restructuring to better focus its business.

Last year, TreeHouse sold its snacks division and came to an agreement to sell its ready-to-eat cereal business.

The cereal divestment ultimately was halted by antitrust concerns from the U.S. Federal Trade Commission, but the company has said it is still looking to sell, reports Food Dive.

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