Private label powerhouse TreeHouse Foods Inc. on June 30 said it will acquire Flagstone Foods, a St. Paul, Minn., maker of private label healthy snacks, for $860 million in cash, subject to an adjustment for working capital. Flagstone's key owner is Gryphon Investors.
The companies claim Flagstone Foods holds the No. 1 private label position in the trail mix and dried fruit categories. The company has approximately 1,365 employees and operates plants in Minneapolis and Roberson, N.C. Adding Flagstone's $697 million in sales will push TreeHouse revenues to about $3.5 billion.
"Flagstone Foods is ideally situated at the intersection of health and wellness, snacking and the perimeter of the store, and represents an attractive new platform for TreeHouse to enter the on-trend, rapidly growing $7.1 billon healthy snacks category," said Sam Reed, chairman, president and CEO of TreeHouse, based in Oak Brook, Ill.
"Over the last three years, the company has seen top line growth of 24 percent per annum as well as meaningful margin expansion, and has a clear strategy in place to continue its growth trajectory," Reed continued. "In addition, Flagstone Foods has made great strides in partnering with retailers to merchandise healthy snacks along the perimeter of the store, where consumer traffic continues to grow."
Reed indicated Flagstone CEO Paul Lapadat and his management team will be staying on.