The Hillshire Brands Company and Pinnacle Foods Inc have entered into a definitive agreement under which Hillshire Brands will acquire all
outstanding shares of Pinnacle Foods in a cash and stock transaction. Under the terms of the agreement, each share of Pinnacle Foods common stock will be exchanged for $18.00 in cash and 0.50 shares of Hillshire Brands common stock.
The total enterprise value of the transaction is approximately $6.6 billion. The transaction brings together two highly complementary businesses with leading, iconic brands, skilled employees and lean cost structures, to create a diversified food company with estimated pro forma 2014 sales of $6.6 billion. On a combined basis, the companies will have leading positions in key frozen, refrigerated and center of store grocery categories.
Said Sean Connolly, President and CEO, Hillshire Brands. “The acquisition creates a leading branded food company with enhanced scale, reach, and capabilities while providing margin expansion and strong EPS accretion. The new Hillshire Brands will have a strengthened position in frozen foods, new opportunities in the center store for our brands and in refrigerated for Pinnacle Foods’ brands. We believe our increased scale combined with a more diversified portfolio will deliver strong, consistent cash flows. This will enable us to continue to invest in our brands, enhance our portfolio, pursue value accretive M&A and deliver significant long-term value to our shareholders.”
“This compelling transaction offers Pinnacle Foods shareholders an immediate premium and the opportunity to participate in the tremendous potential of the combined organisation,” said Bob Gamgort, CEO, Pinnacle Foods. “The complementary portfolios and strategic fit of these two companies create significant value for the shareholders of both organizations. Our common passion for developing innovative products and maintaining close ties with our customers will position the combined entity to deliver outstanding benefits for employees, customers and shareholders. The combined company will operate under the Hillshire Brands name and will be headquartered in Chicago.
Pinnacle Foods Inc (based in Parsippany, New Jersey), through its subsidiaries, manufactures, markets, and distributes branded convenience food products in North America. It operates through three segments: Birds Eye Frozen, Duncan Hines Grocery, and Specialty Foods.The company sells its products through supermarkets, grocery wholesalers and distributors, mass merchandisers, super centers, convenience stores, dollar stores, drug stores, and warehouse clubs in the US and Canada, as well as in military channels and foodservice locations.