TreeHouse Foods to Acquire Sturm Foods
TreeHouse Foods announces that it has signed a definitive agreement to acquire Sturm Foods, the leading private label manufacturer of hot cereal and powdered soft drink mixes, from HM Capital Partners LLC and other shareholders. The transaction is valued at $660 million, with closing expected by March 31, 2010.
"Sturm Foods is a significant addition to TreeHouse, both strategically and financially," says Sam K. Reed, chairman and chief executive officer of TreeHouse Foods. "Sturm will give us the leadership position within the private label hot cereal and powdered soft drink mix categories. Both categories are large and growing, offer health and convenience benefits, and have significant private label shares of 26 percent and 20 percent, respectively."
The acquisition of Sturm will significantly strengthen TreeHouse's presence in private label dry grocery, expand EBITDA margins and enhance cash flows, as well as improve the company's R&D, packaging, mixing and flavoring capabilities. Sturm had sales of $340 million for the twelve months ended Sept. 30, 2009. Following the acquisition, TreeHouse will have pro forma sales of approximately $1.9 billion and adjusted EBITDA of over $275 million. TreeHouse expects the transaction to be more than 16 percent accretive on an annualized basis following the acquisition, adding $0.38 to $0.40 in EPS.
"Sturm Foods is a significant addition to TreeHouse, both strategically and financially," says Sam K. Reed, chairman and chief executive officer of TreeHouse Foods. "Sturm will give us the leadership position within the private label hot cereal and powdered soft drink mix categories. Both categories are large and growing, offer health and convenience benefits, and have significant private label shares of 26 percent and 20 percent, respectively."
The acquisition of Sturm will significantly strengthen TreeHouse's presence in private label dry grocery, expand EBITDA margins and enhance cash flows, as well as improve the company's R&D, packaging, mixing and flavoring capabilities. Sturm had sales of $340 million for the twelve months ended Sept. 30, 2009. Following the acquisition, TreeHouse will have pro forma sales of approximately $1.9 billion and adjusted EBITDA of over $275 million. TreeHouse expects the transaction to be more than 16 percent accretive on an annualized basis following the acquisition, adding $0.38 to $0.40 in EPS.