Singapore-listed Del Monte Pacific (DMPL) has signed a definitive agreement to acquire the consumer food business of the US-based Del Monte Foods (DMF) for $1.67bn to expand beverage and culinary products.
The deal will reunite DMPL with US parent brands and opens access to well-established and profitable US packaged food market. It will add net sales of more than $1.8bn and adjusted EBITDA of about $180m to DMPL.
DMF, which posted sales and EBITDA of $1.8bn and $178m respectively for the fiscal year ended on 28 April 2013, has extensive presence in the US market with its canned fruit, vegetable, tomato and broth businesses.
Under the terms of the deal, DMPL will acquire US brands like Del Monte, Contadina, S&W and College Inn and certain assets, apart from assuming certain liabilities related to DMF’s consumer food business in the US. It also includs equity interests in certain South American subsidiaries from DMF.
Rolando Gapud, chairman of the board of DMPL, said: “Prior to this acquisition, the US was one of few key markets where our company did not have a direct presence nor have its own brands.
“We also believe that DMF’s consumer food business provides an attractive platform to offer certain products appealing to the large and fast growing Hispanic and Asian American population in the US.”
The acquired business will be managed under a separate platform and will be overseen by a US-based CEO and management team.
The operating organisation of DMF’s consumer food division is expected to be largely transferred to DMFL together with the assets and operations of the business.
Perella Weinberg Partners served as lead financial advisor to DMPL in connection with the transaction.
The transaction, which is subject to regulatory approvals, is expected to close in the first quarter of 2014.