Pinnacle Foods Goes Public

April 4, 2013
Blackstone Group sells 32 percent of Pinnacle Foods into stock market.

Pinnacle Foods Inc., Parsippany, N.J., in late March went public, selling 29 million shares of stock, about 32 percent of the company, at $20 per share. The initial public offering did well in early going, breaking $23 per share by April 1.

Pinnacle began trading on the New York Stock Exchange on March 28 under the ticker symbol PF. The company granted underwriters a 30-day option to purchase up to an additional 4.35 million shares at the initial public offering price.

After costs, the public offering should net approximately $545.2 million for Pinnacle Foods – actually for Blackstone Group LP, which bought Pinnacle in 2007 for $2.16 billion and retains approximately 68 percent of the company.

All of proceeds will be used, together with cash on hand, to pay down $667 million in outstanding debt.

Ironically, one of the former Pinnacle owners Blackstone bought out in 2007 was C. Dean Metropoulos, who this month is sewing up the acquisition of some of the assets of Hostess Brands (see our reporting of the Hostess acquisition).

Pinnacle had 2012 sales of $2.48 billion, essentially even with the previous year, and net earnings of $53 million.

Two former Kraft execs head the company. Chairman Roger Deromedi started his career with General Foods and eventually was CEO of Kraft Foods, taking that company public. He left the company in 2006. CEO Bob Gamgort was with Kraft about the same time, although he left to become president of Major League Baseball Properties, then joined Mars Inc. in 1998. He was Mars’ North American president when he left to join Pinnacle in 2009.

Before and after Blackstone’s acquisition, Pinnacle Foods assembled a portfolio of well-known but secondary brands. The company was founded in 1998 as Vlasic Foods International, acquiring the Swanson TV dinners, Open Pit and Vlasic Pickles brands from Campbell Soup Co. In 2003, it acquired St. Louis-based Aurora Foods. In 2009, two years after Blackstone bought in, Pinnacle Foods bought Birds Eye Foods Inc. Other brands include Duncan Hines, Aunt Jemima, Log Cabin, Celeste pizza, Van de Kamp's fish sticks and Lender's frozen bagels.

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