Adding a batch of some of the nation's best-known food brands, Hillshire Brands plans to buy Pinnacle Foods in a cash and stock deal valued at $6.6 billion.


Hillshire Brands, Pinnacle Foods, acquisition, food brands, grocery categories, center store, frozen foods, Sean Connolly, Bob Gamgort, food company, grocery brands


































































































































































































































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Hillshire Brands to acquire Pinnacle Foods

May 12th, 2014

CHICAGO and PARSIPPANY, N.J. – Adding a batch of some of the nation's best-known food brands, Hillshire Brands plans to buy Pinnacle Foods in a cash and stock deal valued at $6.6 billion.

Hillshire and Pinnacle said Monday that the agreement joins two businesses with iconic brands to create a diversified food company with estimated pro forma 2014 sales of $6.6 billion. Combined, the companies will have leading positions in key frozen, refrigerated and center store grocery categories.

The brand roster of Chicago-based Hillshire, which had sales of about $4 billion in fiscal 2013, includes such names as Jimmy Dean, Ball Park, Hillshire Farm, State Fair, Sara Lee frozen bakery and Chef Pierre pies, as well as artisanal brands Aidells, Gallo Salame and Golden Island premium jerky.

With the acquisition, the company will add the broad lineup of grocery brands from Parsippany, N.J.-based Pinnacle, which includes Duncan Hines baking mixes and frostings; Vlasic and Vlasic Farmer's Garden shelf-stable pickles; Wish-Bone and Western salad dressings; Mrs. Butterworth's and Log Cabin table syrups; Armour canned meats; Brooks and Nalley chili and chili ingredients; Duncan Hines Comstock and Wilderness pie and pastry fruit fillings; Open Pit barbecue sauces; Birds Eye, Birds Eye Steamfresh, C&W, McKenzie's and Freshlike frozen vegetables; Birds Eye Voila! bagged frozen meals; Van de Kamp's and Mrs. Paul's frozen prepared seafood; Hungry-Man frozen dinners and entrées; Aunt Jemima frozen breakfasts; Lender's frozen and refrigerated bagels; Celeste frozen pizza; Tim's Cascade Snacks; Hawaiian kettle style potato chips; Erin's popcorn; and Snyder of Berlin and Husman's snacks.

"The combination of Hillshire Brands and Pinnacle Foods brings together two highly complementary organizations with strong brands, skilled employees and lean cost structures," Sean Connolly, president and chief executive officer of Hillshire Brands, said in a statement. "The acquisition creates a leading branded food company with enhanced scale, reach, and capabilities while providing margin expansion and strong EPS accretion. The new Hillshire Brands will have a strengthened position in frozen foods, new opportunities in the center store for our brands and in refrigerated for Pinnacle Foods' brands. We believe our increased scale combined with a more diversified portfolio will deliver strong, consistent cash flows. This will enable us to continue to invest in our brands, enhance our portfolio, pursue value accretive M&A and deliver significant long-term value to our shareholders."

Plans call for combined company to operate under the Hillshire Brands name and be based in Chicago, with Connolly serving as president and CEO. Hillshire is slated to appoint a representative from investment firm Blackstone, of which affiliates hold 51% of Pinnacle's outstanding shares, to its board upon the closing of the transaction.

Hillshire and Pinnacle said the transaction has been unanimously approved by the boards both companies and is expected to close by September, pending shareholder and regulatory approvals and other customary closing conditions.

"This compelling transaction offers Pinnacle Foods shareholders an immediate premium and the opportunity to participate in the tremendous potential of the combined organization," stated Bob Gamgort, CEO of Pinnacle Foods. "The complementary portfolios and strategic fit of these two companies create significant value for the shareholders of both organizations. Our common passion for developing innovative products and maintaining close ties with our customers will position the combined entity to deliver outstanding benefits for employees, customers and shareholders."

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