| Make foodmate.com your Homepage | Wap | Archiver
Advanced Top
Search Promotion
Search Promotion
Post New Products
Post New Products
Business Center
Business Center
 
Current Position:Home » News » Processed Foods » Savory Snacks » Topic

TreeHouse on the lookout for acquisitions

Zoom in font  Zoom out font Published: 2014-05-09  Views: 4
Core Tip: A $1.2 billion financing structure entered into on May 6 has given TreeHouse Foods, Inc. the resources, and apparently also the appetite, for future acquisitions.
A $1.2 billion financiTreeHouse ng structure entered into on May 6 has given TreeHouse Foods, Inc. the resources, and apparently also the appetite, for future acquisitions.

“We worked with our bank group to significantly upside our borrowing capacity and take advantage of what is shaping up to be a very attractive M.&A. environment,” said Dennis Riordan, executive vice-president and chief financial officer, in a May 8 conference call to discuss first-quarter financial results.

The financing structure consists of two parts. First, a new $900 million unsecured revolving credit facility replaces the company’s $750 million revolving credit facility under its prior credit agreement.

“We also increased the size of the accordion feature of the revolver, which gives us access to an additional $400 million on availability at the same terms subject to approval,” Mr. Riordan said.

For the second part, TreeHouse Foods entered into a new $300 million, seven-year term loan. The company used the proceeds of the loan, together with a draw on the new revolving credit facility at closing, to repay in full amounts outstanding under the company’s prior credit arrangement.

“These new facilities, combined with our refinanced senior notes outstanding, represent a total of $1.6 billion in available financing, of which approximately $900 million was outstanding at March 31, 2014,” Mr. Riordan said. “This gives us at least $700 million in immediate financing flexibility.”

Sam Reed, chairman, president and chief executive officer of Oak Brook-based TreeHouse Foods, also spoke of an attractive environment for mergers and acquisitions.

“I think that the market is characterized by, one, a continuation of readily available funding for deals of practically any size, and what is different now than we’ve had in earlier periods when money was also relatively cheap, is that we are seeing more sellers come to the marketplace and in a greater variety,” Mr. Reed said. “There are private equity groups that are looking to monetize long-term holdings and importantly, establish a basis for raising new funds.”

He said another factor involves companies considering reorganization and casting off certain elements “that are no longer in the center of their wheelhouse.”

“And we have the capability and the good fortune to be able to simultaneously scan these matters across not only an array of different sizes and things that require different methods of financing, but importantly across a wide variety of beverages and foods,” Mr. Reed said.

In the first quarter ended March 31, TreeHouse Foods had earnings of $14,322,000, or 39c per share on the common stock, which compared with $22,974,000, or 63c per share, in the previous year’s first quarter.

Four items affected the year-over-year quarterly comparison. A per share expense of 32c came because of the refinancing of the company’s high yield notes. A per share expense of 5c was due to acquisition, integration and related costs. A 3c per share loss was due to the foreign currency translation on an intercompany note. A 2c per share expense related to the previously announced restructuring of the company’s soup operations.

Adjusted EBITDA of $80,590,000 in the first quarter compared with adjusted net income of $76,824,000 in the previous year’s first quarter. First-quarter net sales rose to $618,903,000 from $540,110,000. The 15% increase largely was due to sales from recent acquisitions, including Cains Foods and Associated Brands, and improved volume/mix.

In the company’s North American Retail Grocery segment, net sales in the first quarter rose 17% to $452,403,000 from $386,081,000. Volume gains in beverages, mostly single-serve hot beverages, and Mexican sauces categories were offset by volume decreases in cereals, pickles, soup and salad dressings.

In the Food Away From Home segment, net sales increased 8% to $88,673,000 from $81,813,000. In the Industrial and Export segment, net sales increased 8% to $77,827,000 from $72,216,000.

In its outlook for 2014, TreeHouse Foods said it expects adjusted earnings-per-share growth of 10% to 13% to $3.50 to $3.60 before considering accretion from the acquisition of Protenergy Natural Foods, a developer and manufacturer of food and beverage products, namely private label broth, soups and gravies. TreeHouse Foods previously announced the Protenergy acquisition should add 5c to 7c per share to earnings in 2014 and 11c to 14c per share to earnings in 2015.

“We are off to a fast start to what promises to be an outstanding year as private label opportunities fuel our renewed growth,” Mr. Reed said. “We are making great strides forward in pursuit of our strategic goals, expansive growth, operational efficiency and financial performance.”

 
 
[ News search ]  [ ]  [ Notify friends ]  [ Print ]  [ Close ]

 
 
0 in all [view all]  Related Comments

 
Hot Graphics
Hot News
Hot Topics
 
 
Powered by Global FoodMate