TreeHouse Foods completed the acquisition of the majority of the U.S. branded pasta business of Riviana Foods, a subsidiary of Ebro, for $242.5 million in cash, subject to customary adjustments based on inventory at closing.
The company said in a statement that the acquisition includes well-known regional brands, including Skinner, No Yolks, American Beauty, Creamette, San Giorgio, Prince and Light ‘n Fluffy, Mrs. Weiss’, New Mill, P&R Procino-Rossi, and Wacky Mac, as well as the St. Louis manufacturing facility, which employs approximately 90 people. The acquisition does not include the Ronzoni national brand, or its Winchester, Va., and Fresno, Calif. plants.
“I want to welcome our newest members of the pasta team to TreeHouse,” said Steve Oakland, CEO and President of TreeHouse Foods. “This acquisition represents a wonderful opportunity to not only strengthen our portfolio but to bring together strong industry talent which will enable us to better serve our customers and to deliver greater value to our shareholders.”
According to an article published by BakingBusiness.com, “with its ownership of these brands and attendant strong position in the private label (a $631 million annual market), TreeHouse will stand as a major player in the pasta market”.
TreeHouse expects the acquisition to be accretive by $0.20 to $0.30 per share in the first full year. Normalized revenue for the acquired pasta business is expected to be between $170 and $180 million and normalized EBITDA is projected to be between $25 and $30 million, pre-synergies. Because the acquisition was structured as an asset purchase, TreeHouse expects to realize approximately $40 million in cash tax benefits on a net present value basis.
The company funded the acquisition and related fees and expenses with cash on hand.
TreeHouse Foods, Inc. is a leading manufacturer and distributor of private label packaged foods and beverages in North America. It has nearly 40 production facilities across North America and Italy with an extensive product portfolio which includes snacks, beverages, and meal preparation products, available in shelf-stable, refrigerated, frozen, and fresh formats.