Pinnacle Buys Birds Eye for $1.3B

Pinnacle Foods Group LLC signs a definitive agreement to acquire Birds Eye Foods Inc. from a holding company controlled by Vestar Capital Partners, Pro-Fac Cooperative, and Birds Eye management in a transaction valued at $1.3 billion.

 

"We are excited about bringing Birds Eye Foods into the Pinnacle Foods family of brands," says Pinnacle Foods CEO Bob Gamgort. "The Birds Eye brand has $640 million in net sales in the U.S. 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. This compelling combination creates a leader in both the frozen and shelf stable business segments and enables us to better serve our consumers and customers."

 

Birds Eye Foods is a nationally recognized packaged food company with more than $930 million of total sales and consumer brands in frozen vegetables and meals, including Birds Eye, Birds Eye Steamfresh, and Birds Eye Voila!.Pinnacle Foods, owned by private equity funds controlled by The Blackstone Group, manufactures and distributes iconic, branded packaged foods that can be found in 80 percent of U.S. households. The companys diversified portfolio includes well-known brands such as Duncan Hines baking mixes and frostings, Vlasic pickles, peppers and relish, Mrs. Butterworth's and Log Cabin syrups.

 

Pinnacle Foods expects to fund the transaction using a combination of new debt financing at the company and a significant new equity contribution from Blackstone. The transaction will reduce leverage multiples at Pinnacle Foods. The closing of the transaction, which is expected to occur no later than the first quarter of 2010, is subject to customary conditions, including regulatory approvals.