Milling & Baking News - July 16, 2019 - 10

Business

Atlas Holdings to acquire snacks
business from TreeHouse Foods
OAK BROOK, ILL. - Atlas Holdings
L.L.C., Greenwich, Conn., has reached
an agreement to acquire the private
label Snacks business of Oak Brookbased TreeHouse Foods, Inc. for $90
million. Atlas Holdings is a private
investment firm that has 19 portfolio
companies in a diverse range of industries, including aluminum processing,
automotive, building material and others. The investment firm's current portfolio does not include any other food
manufacturers.
TreeHouse Foods' Snacks unit employs 800 and has three manufacturing plants in Robersonville, N.C.; El
Paso, Texas; and Dothan, Ala. TreeHouse Foods projects the Snacks business will generate $670 million in sales
in 2019.
"This Snacks business will be a
welcome addition to the Atlas family of manufacturing and distribution companies," said Michael Sher,
a partner with Atlas Holdings. "Customers are consistently choosing private label brands, and this business is
a premier manufacturer with unique
growth potential. We're excited to
partner with this team to deliver the
finest healthy, private label snacks in
the industry."
The sale is subject to customary
closing conditions and is expected to
close during the third quarter of this
year.
"The sale of the Snacks division is
a key step in optimizing TreeHouse's
overall product portfolio," said Steven T. Oakland, president and chief
executive officer of TreeHouse Foods.

"It is the culmination of TreeHouse's
strategic review of its Snacks business.
This transaction allows the Snacks division to unlock its potential and serve
its customers even better under Atlas'
ownership."
TreeHouse Foods announced this

©HANDMADEPICTURES - STOCK.ADOBE.COM

past December that its Snacks business was under strategic review. As
recently as this past May, management said the company had a "snacks
issue."
"Snacks has lost meaningful volume
beyond simply the large customer that
we called out last year," said Matthew
J. Foulston, executive vice-president
and chief financial officer, during a
May 2 conference call with securities analysts to discuss first-quarter
results. "Clearly, profitability of the
business is deteriorating."
TreeHouse Foods acquired the
Snacks business in 2014 from Flag-

Ferrero Group affiliate to acquire
Kelsen from Campbell Soup
CAMDEN, N.J. - CTH Invest, a
Belgian holding company affiliated
with the Ferrero Group, has agreed
to acquire the Kelsen Group from the
Campbell Soup Co. for $300 million.
The Kelsen Group is a manufacturer of
baked snacks sold under such brands
as Kjeldsens and Royal Dansk.
The Kelsen Group employs 400 and
has generated $157 million in sales
during the past 12 months.
"The sale of Kelsen Group supports
our strategy to focus on North America where we have iconic brands and
strong market positions, while reduc10 / July 16, 2019

Milling & Baking News

ing debt," said Mark Clouse, president
and chief executive officer of Campbell Soup.
Mr. Clouse said selling
Kelsen separately from
the rest of its international business "generates the greatest
possible value for
Campbell."
Campbell Soup acquired the Kelsen
Group in 2013.
The potential fate of
the rest of Campbell Soup's

KELSEN GROUP

stone Foods, St. Paul, Minn., for $860
million. Flagstone reported sales of
$697 million during 2013. The company is a manufacturer of snack nuts,
trail mixes and dried fruit.
At the time of the acquisition, TreeHouse described Flagstone as "ideally
situated at the intersection of health
and wellness, snacking and the perimeter of the store."
In a July 8 research report, Robert Moskow, an analyst with Credit
Suisse, called TreeHouse's announcement that it will sell the Snacks business "a positive step in its effort to
reduce the complexity of its portfolio and improve its operational
effectiveness."
"While the management team clearly did not get the price it expected
when it put the business up for strategic review last year, we are glad to
see the company exit it entirely rather
than hold out hope for a turnaround
or enter a joint venture," Mr. Moskow
said. "The snack nuts business kept
losing customers, and it operated at a
very thin margin due to its commoditized nature. It is time to cut bait."
He said Credit Suisse expects the
transaction will boost its earnings-pershare outlook for TreeHouse by 38c on
a pro forma basis.
"At the risk of reopening the
wound, the $90 million sale price for
this $670 million business compares
to the $875 million it paid Flagstone
snack nuts just five years ago," Mr.
Moskow said. "However, it will remove EBIT and EBITDA losses of $28
million and $6 million respectively,
from the 2019 base on a pro forma
basis and allow management to focus
on product lines where it has more
competitive advantages." MBN
international business, including the
Arnott's cookie and cracker brands, remains up in the air. Campbell Soup first
announced plans to divest its international business unit in late August 2018.
Since that time, a number of companies
and private equity firms have
been mentioned as potential
suitors, including Mondelez International, Kraft
Heinz Co. and Pacific
Equity Partners.
Mondelez reportedly ended its pursuit of the Arnott's
business in early June,
balking at Campbell
Soup's asking price for
the business. MBN
bakingbusiness.com / world-grain.com

http://STOCK.ADOBE.COM http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - July 16, 2019

Table of Contents for the Digital Edition of Milling & Baking News - July 16, 2019