After months of speculation, TreeHouse Foods, a manufacturer of private label food and beverage items, has decided it will not sell the company.
In November of 2021, the Oak Brook, Ill.-based company said the board of directors approved a plan to “explore strategic alternatives, including a possible sale of the company.” In a new statement, the company has said it will not sell, citing the long-term prospects for private label.
TreeHouse operates in 29 product categories across two divisions, and has approximately 40 production facilities across North America and Italy. In Q4 of 2021, TreeHouse reported net sales of $1.16 billion, a 1% decline compared to Q4 2020, which the company said was a result of supply chain disruptions in the past year.
"Throughout the comprehensive strategic review process, we have received clear feedback from multiple constituencies that the long-term prospects for private label and for TreeHouse remain highly compelling, but the business mix is complex,” said Ann M. Sardini, chair of TreeHouse’s board. “That feedback further validates the company's strategic plan for simplification and growth. In addition, the feedback cited the impact the macro-economic and financing environment, which has changed significantly since we began the exploration of a sale of the company, has had on the company's business in the short term. Accordingly, the board has determined that now is not the right time to pursue a sale of the entire company to maximize shareholder value.”
TreeHouse Foods reaffirmed its 2022 guidance, including net sales growth of at least 11% year-over-year and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $385 to $415 million, up approximately 5% year-over-year at the midpoint. TreeHouse said it expects that improvement in its performance will be weighted toward the second half of the year, as the company expects labor shortages and supply chain disruption will continue to challenge profitability and volume in the first half.
"The demand trends in private label continue to strengthen, and we are well-positioned to build on our momentum in advantaged categories,” said Steve Oakland, president and CEO of TreeHouse. “We remain confident in our strategy and our outlook for the full year. Our commitment to supporting our customers to meet their growing demand, combined with our ongoing plans to implement supply chain enhancements to reduce costs and improve margins, will drive meaningfully improved results and value creation. I want to thank our team of dedicated TreeHouse employees for their commitment to serving our customers and delivering value as we navigate the current environment."