ConAgra agrees to sell Ralcorp to TreeHouse Foods

Omaha, Neb.-based ConAgra Foods Inc. said it reached a definitive agreement to sell its private label operations, Ralcorp, to TreeHouse Foods, Oak Brook, Ill., for approximately $2.7 billion in cash, excluding transaction-related expenses.

“The sale of our private label business marks another important milestone as we remake ConAgra Foods into a focused, higher-margin, more contemporary and higher-performing company,” said Sean Connolly, president and CEO, ConAgra Foods. “This transaction will enable ConAgra to sharpen our focus and resources on our consumer foods and commercial foods segments as we continue to move quickly to drive sustainable growth and deliver enhanced shareholder value.”

“Today’s announcement follows a robust sale process involving more than 35 potential buyers, including both strategic buyers and financial sponsors,” he added. “We are confident that the private label business will be in good hands with TreeHouse Foods and better-positioned to reach its full potential as part of a focused private label company.”

Under the terms of the agreement, ConAgra Foods said it will divest the vast majority of its private label operations, which are classified as discontinued operations. Among other assets, the operations include a network of 32 manufacturing facilities in the United States, Canada and Italy. ConAgra Foods will retain certain private label operations with a strong connection to its existing consumer foods business, specifically canned pasta, cooking spray, peanut butter, pudding/gels, Gelit frozen pasta product offerings, and the HK Anderson and Kangaroo brand equity, trademark and business portfolios.

ConAgra said it expects to generate approximately $2.7 billion in proceeds from the sale, less transaction expenses, and intends to use the net proceeds primarily for debt reduction. The transaction is subject to customary closing conditions and regulatory clearances, and is expected to close in the first quarter of calendar year 2016, ConAgra stated.