US food company ConAgra Foods Inc (NYSE:CAG) unveiled a definitive deal to buy the Bertolli and PF Chang’s Home Menu frozen meals businesses from Anglo-Dutch consumer goods giant Unilever (LON:ULVR; AMS:UNA) for USD265m (EUR215.8m) in cash.
The acquisition, which is the company’s fifth one for the last 12 months, matches the company’s strategy to build its private label by expanding its core operations and growing into adjacent categories, as well as boost its international growth. It previously added National Pretzel Company, Del Monte Canada, Odom’s Tennessee Pride and the pita chip business of Kangaroo Brands to its portfolio.
Commenting on the deal, ConAgra Foods CEO Gary Rodkin said that the two brands were “excellent additions” to its offering and the company would seek to develop them further.
As part of the deal, ConAgra Foods will acquire a licence for the use of the Bertolli brand as well as Unilever’s existing licence with PF Chang’s for the use of the PF Chang’s Home Menu brand name. The deal does not include a Unilever facility, where the Bertolli and PF Chang’s frozen meals are currently produced.
ConAgra Foods added that the purchase would not impact its financial targets for fiscal 2013. Thus, it still expects its adjusted earnings per share to increase by 6% to 8% over the USD1.84 booked for fiscal 2012. Operating cash flow is seen to top USD1.2bn.
The transaction is expected to be completed within a month or two, subject to the fulfillment of customary closing conditions.