TreeHouse Foods is considering a sale of the entire company or its components, the company announced Nov. 8.
TreeHouse, which makes a variety of processed foods mostly for private label, will look at “strategic alternatives,” including an overall sale or the divestiture of “a significant portion” of its meal prep business.
The announcement came after TreeHouse reported organic net sales growth of 5.3%, to $1.1 billion, in the third fiscal quarter compared with last year. However, adjusted earnings were down 20.5%, to $108.6 million. The company identified labor problems and higher prices for commodities, packaging and shipping as challenges that will continue into 2022.
TreeHouse’s board ordered a strategic review of the company’s prospects early this year. That review resulted in the decision to consider a sale.
“The TreeHouse team has executed a major transformation since 2018, improving the ability to support its private label customers and navigate a challenging operating environment,” board chair Ann Sardini said in the company statement. “This progress and the strong long-term consumer demand trends for private label provide a favorable backdrop as the board thoroughly reviews and considers strategic options with a commitment to maximizing value for all shareholders."
The statement specifically mentioned the meal prep division, which makes shelf stable and refrigerated products including dry dinners, refrigerated dough and more. That division would have risen only 1.8% in net sales year-over-year for the third quarter except for the acquisition last year of Riviana Foods’ U.S. pasta business, which pushed the division’s growth for the quarter to 7.4%