May 14, 2014
(Editor’s Note: This post is an excerpt from an article appearing in Practitioner Insights on WestlawNext)
Chicago-based Hillshire Brands Co. will acquire Pinnacle Foods Inc. in a $4.3 billion cash-and-stock deal. The acquisition, which will expand Hillshire’s branded food offerings, is the third acquisition for Hillshire within the past year and the latest branded food deal to occur in the last few years.
Pursuant to the agreement and plan of merger, Hillshire will pay as consideration $18 cash and 0.50 shares of Hillshire Brands common stock for each share of Pinnacle Foods common stock.
Hillshire expands brand with acquisitions
Hillshire, which owns brands including Jimmy Dean, Ball Park, Hillshire Farm and Sara Lee, is seeking to diversify its portfolio. Pinnacle’s packaged foods offerings include brands such as Mrs. Butterworth’s, Duncan Hines and Vlasic. Hillshire expects the acquisition to combine “two highly complementary businesses with leading, iconic brands to create a diversified food company” that “will have leading positions in key frozen, refrigerated and center of store grocery categories.”
Hillshire has been focused on expanding its brand recently and the Pinnacle Foods acquisition is the latest in furtherance of this strategy.
The company announced in April that it was acquiring Van’s Natural Foods from private equity firm Catterton Partners for $165 million in cash. Van’s offers gluten-free and allergy-friendly frozen breakfast and snack foods. Hillshire acquired the brand to expand its offerings in the frozen foods section and to give it a “proven health and wellness brand with extendability beyond frozen.”
Further, the company agreed to acquire Golden Island Jerky in September 2013. Hillshire used Golden Island, which makes gourmet pork and beef jerky products, to enter the dried meat snacks market.