TreeHouse Foods To Be Acquired by European Investment Firm for $2.9 Billion

Everyone saw this coming. Private label manufacturer TreeHouse Foods Inc. today (Nov. 10) said it has agreed to sell itself to Industrial F&B Investments III Inc., a European investment fund, for $2.9 billion, all in cash.

Under the terms of the agreement, for each share of common stock TreeHouse shareholders will receive $22.50 per share in cash and one non-transferable Contingent Value Right (CVR) per common share. The CVR will provide each shareholder with an opportunity to receive proceeds, if any, from ongoing litigation relating to TreeHouse’s coffee business (more about that at the bottom).

The upfront cash portion of the consideration of $22.50 per common share represents an equity value of $1.2 billion, a 38% premium to TreeHouse Foods' closing price on Sept. 26, the last full trading day prior to market speculation around a transaction and a 29% premium to the company's 30-day volume-weighted average share price up to that date.

The news comes the same day TreeHouse announced its third-quarter financials – which were not good. Net sales were $840 million, up a tiny 0.1% from the same period last year, but the net loss was $265.8 million, compared to a net loss of $3.4 million for the same period of the previous year. That loss, however, included a non-cash goodwill impairment loss of $289.7 million. Otherwise, adjusted earnings before taxes, etc., were $91.6 million.

TreeHouse for years has been trying to reshape itself. Steve Oakland, former vice chairman of J.M. Smucker Co. and president of its U.S. Food and Beverage business unit, took over as CEO from founder Sam Reed in 2018 and began selling off underperforming and ill-fitting parts of the business. Oakland has since added the title of chairman.

One of those underperforming assets, its Meal Preparation business, was sold to  Investindustrial, Industrial F&B Investments' parent firm, in April 2022 for $950 million.

Once the largest private label manufacturer in the country, TreeHouse had $6.3 billion in sales in 2017 and was our Processor of the Year in 2010. It’s been on track for about $3.4 billion in sales this year.

This April, TreeHouse eliminated its chief commercial officer role and announced the elimination of 150 corporate support jobs, all in the name of operational efficiency.

TreeHouse was created in 2005 by Reed and a few other former Keebler executives (hence the name). While many food & beverage processors are primarily brand managers and marketers, TreeHouse is a manufacturer first and foremost. At one time it had 38 plants, all in North America.

"TreeHouse Foods has been executing a strategy to become a focused snacking and beverage private brand leader with depth in categories, attractive long-term prospects and an agile operating model,” Oakland said today.

"Investindustrial is delighted to welcome TreeHouse as the newest platform in its global food and beverage portfolio," said Andrea Bonomi, chairman of the industrial advisory board of Investindustrial. "The acquisition of TreeHouse Foods, which will operate independently within Investindustrial's portfolio, underscores the firm's expertise in food and beverage and highlights its strong presence in North America, where Investindustrial portfolio companies will have a total of over 85 manufacturing plants and 16,000 employees, following the acquisition of TreeHouse Foods.

“We are confident in the long-term growth opportunities in private brands and the categories where TreeHouse Foods operates, as well as the company's ability to build on its strong foundation of leadership,” Bonomi contnued. “We look forward to working closely with the TreeHouse Foods leadership team and employees to drive its long-term success."

The transaction, which has been unanimously approved by TreeHouse’s board of directors, is expected to close in the first quarter of 2026, subject to approval by TreeHouse Foods shareholders. Jana Partners LLC, a 10% shareholder of TreeHouse Foods common stock, has agreed to vote in favor of the transaction at the special meeting of TreeHouse Foods shareholders. The transaction is not subject to financing conditions.

Upon completion of the transaction, the Company's common stock will no longer be listed on the New York Stock Exchange, and TreeHouse Foods will become a private company.

About that coffee litigation: Since 2014, TreeHouse Foods has been suing Keurig Green Mount and now Keurig Dr. Pepper for monopolizing the single-serve coffee market. TreeHouse back then came up with a private label K-cup. TreeHouse’s own economic experts estimated a successful outcome could be worth $719-1.5 billion. The case is still pending.