Del Monte Foods to Sell Consumer Products Business to Del Monte Pacific Limited for $1.675B
Del Monte Foods today announced that it has reached an agreement to sell its Consumer Products business to Del Monte Pacific Limited for $1.675 billion. Given the distinct operations and markets of Del Monte Foods' two segments, Pet Products and Consumer Products, a sale of the Consumer Products segment to DMPL will ensure that both business units are best positioned for growth in their respective markets. Upon closing, Del Monte Foods will change its name to reflect its focus on the pet products market.
“Over the last two years, we have made significant investments – operationally, strategically and organizationally – to build the Consumer Products and Pet Products segments into businesses capable of capturing the significant opportunity available to each”
DMPL owns the Del Monte® brand in the Philippines and is the exclusive licensee on the Indian Sub-Continent for processed products, and is the owner of the S&W® brand outside of the Americas for both processed products and fresh produce. The company is publicly traded in Singapore and the Philippines and has been a long-term supplier of processed pineapple to Del Monte Foods.
“Over the last two years, we have made significant investments – operationally, strategically and organizationally – to build the Consumer Products and Pet Products segments into businesses capable of capturing the significant opportunity available to each,” said Dave West, CEO of Del Monte Foods. “We believe DMPL is the right company to build on the Consumer Products segment's recent success and achieve its next phase of growth, and we look forward to focusing on expanding our Pet Products business, which operates in one of the most attractive categories across the U.S. consumer packaged goods industry.”
Del Monte Foods has agreed to sell the Consumer Products business in order to focus its resources and efforts on capturing continued growth opportunities in its Pet Products business, which participates in an expanding $20 billion pet category, through greater emphasis on pet snacks and the pet specialty channel. This agreement comes after a strategic review that determined a sale of the Consumer Products business provided the best opportunities for the growth and stewardship of the company's two differentiated business portfolios.
DMPL is acquiring Del Monte Foods' strong portfolio of leading consumer packaged goods brands, which generate approximately $1.8 billion of annual sales, as well as an established business model with talented and dedicated employees. Del Monte Foods' Consumer Products brands hold leading positions in numerous packaged goods categories, including #1 branded market share positions in major fruit and vegetable categories and #2 positions in tomato and broth categories. Del Monte Foods Consumer Products brands' leading branded market position in the fruit and vegetable segments immediately provides DMPL with significant scale and reach.
Del Monte Foods' Pet Products brands already have strong market share positions across pet food and pet snack categories. Del Monte Foods anticipates that the continued heightened importance of pets as part of the family, as well as higher consumer spending on more premium pet products, will continue to drive market expansion. The announced sale will allow Del Monte Foods to execute and place greater emphasis on its long-term strategy to strengthen the pet food and pet snacks brand portfolio, building on the recent acquisition of pet specialty brand Natural Balance®.
The transaction is expected to close by early calendar year 2014.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.