Del Monte Pacific buys U.S. canned food business for $1.7 billion
By Anshuman Daga
SINGAPORE (Reuters) - Singapore-listed Del Monte Pacific Ltd DMPL.SI will buy the canned food business of private equity-backed Del Monte Foods Consumer Products Inc for $1.7 billion, gaining a direct presence in the key U.S. market and reuniting a substantial portion of the Del Monte brand family.
Shares in Del Monte Pacific surged 10 percent on the deal.
It said the acquisition will give it the No. 1 branded position in major canned fruit and vegetable categories in the United States as well as the opportunity to offer some of its own products to the large and fast-growing Asian and Hispanic populations there.
The deal will also allow San Francisco-based Del Monte Foods to concentrate on its pet foods unit, including the recent acquisition of Natural Balance. Del Monte Foods was acquired in 2011 by KKR & Co LP (KKR.N: Quote), Vestar Capital Partners and Centerview Capital in a deal valued at $5.3 billion.
With the sale of its canned food business, the company plans to change its name.
Del Monte Pacific, a company that is strong in canned pineapple and tomato sauce, has been enjoying strong growth with net profit nearly trebling over the past three years to $32.1 million in 2012.
The transaction will give it an additional net sales of more than $1.8 billion.
"This landmark transaction offers DMPL greater access to a well-established, attractive and profitable branded consumer food business in the world's biggest market," Del Monte Pacific's Chairman Rolando Gapud said in a statement. Del Monte Pacific, which counts the Philippines as its largest market, is 67 percent-owned by NutriAsia Pacific Ltd (NPL). NPL is owned by the NutriAsia group, which is majority-owned by the Campos family of the Philippines. Continued...