TreeHouse Foods is selling much of its Meal Preparation business for $950 million to an investment firm, in a bid to shore up its sagging bottom line.
The sale to Investindustrial comprises most of the Meal Preparation unit’s businesses, including pasta, pourable and spoonable dressing, preserves, red sauces, syrup, dry blends and baking, dry dinners, pie filling, pita chips and other sauces, according to a company statement. TreeHouse has 22 U.S. plants dedicated to making products for the meal preparation unit; the announcement did not specify how many of them are included in the sale.
"Today's announcement reflects the Board of Director's unanimous determination that divesting a significant portion of the Meal Preparation business for $950 million will deliver greater value for our shareholders than continuing to operate the divested businesses within TreeHouse," board chair Ann Sardini said in the statement.
Proceeds from the sale will be used to reduce debt and strengthen TreeHouse’s balance sheet, the company said. TreeHouse lost $29.4 million in the most recent quarter. In the Meal Preparation unit, operating income was down 14% year-over-year despite an increase in sales of 18%. In the statement announcing the sale, TreeHouse predicts that the divested businesses will have earnings of $70 million.