Buyout Shops Pay $5.3 Billion for Del Monte

Buyout shops Kohlberg Kravis Roberts & Co., Vestar Capital Partners and Centerview Partners will acquire Del Monte for $5.3 billion. The deal values Del Monte at $19 per share, a 40% premium over the company’s average closing price during the past three months. The deal includes the assumption of roughly $1.3 billion in assumed debt. Debt financing will come from Bank of America, Merrill Lynch, Barclays Capital Inc., JPMorgan Chase, Morgan Stanley and KKR Capital Markets.

PRESS RELEASE
Del Monte Foods Company (NYSE: DLM) and an investor group led by funds affiliated with Kohlberg Kravis Roberts & Co. L.P. (“KKR”), Vestar Capital Partners (“Vestar”) and Centerview Partners (“Centerview”) – collectively the “Sponsors”- today
announced that they have signed a definitive agreement under which the
Sponsors will acquire Del Monte for $19.00 per share in cash.
The transaction, which was unanimously approved by Del Monte’s board of
directors, is valued at approximately $5.3 billion, including the
assumption of approximately $1.3 billion in net debt. This price
represents a premium of approximately 40 percent over Del Monte’s
average closing share price during the past three months prior to
November 18, 2010, when market rumors of a transaction began, and is
also higher than any price the Company’s stock has ever achieved.
“This transaction delivers substantial shareholder value and is a clear
endorsement of Del Monte’s strategic success and effective execution.
The hard work and dedication of our talented team has helped to
transform Del Monte from a $1 billion consumer foods business into a
branded pet and consumer products company with more than $3.7 billion in
revenues,” said Richard G. Wolford, Chairman and CEO of Del Monte Foods.
“This transaction will enable our Company to continue to successfully
grow, building on the foundation our team has put into place. We are
excited about the ability to deliver substantial returns to our
shareholders, as well as great prospects for Del Monte employees,
customers and consumers.”
Simon Brown, Member of KKR and head of the firm’s North American
Consumer practice, stated, “Del Monte has a first-rate brand portfolio
and excellent reputation for providing high quality and nutritious
products to families and their pets. We look forward to working with the
Company’s talented employees and investing in the business as we
continue to execute upon Del Monte’s proven strategy for growth. Del
Monte is a great company, with an excellent strategy, a talented team
and a strong future.”
Brian Ratzan, Managing Director and head of Vestar’s Consumer group
said, “Del Monte Foods is a terrific company with iconic consumer and
pet brands. Storied consumer franchises like Del Monte’s – with great
brands in growing categories – will continue to thrive through
investments in innovation and marketing. Vestar looks forward to working
with the Del Monte team and our strategic partners to achieve the
Company’s next phase of growth.”

“Over the last decade, Rick and the entire Del Monte team have built a
unique platform based on powerful brands,” said Jim Kilts, Centerview’s
co-founder and former CEO of Kraft, Nabisco and Gillette. “We are truly
excited to partner with Del Monte as the Company continues to build on
its rich heritage of delivering high quality products to consumers at
attractive prices.”
Del Monte plans to maintain a corporate presence in both the San
Francisco Bay Area and Pittsburgh, with its corporate headquarters
continuing to be located in San Francisco.
Barclays Capital Inc. served as financial advisor to Del Monte Foods and
provided a fairness opinion in connection with the transaction. Perella
Weinberg Partners LP also provided a fairness opinion in connection with
the transaction. Gibson Dunn & Crutcher LLP served as legal advisor to
the Company in connection with this transaction.
Centerview Partners acted as lead financial advisor to the Sponsors in
this transaction. Bank of America Merrill Lynch, J.P. Morgan Securities
and Morgan Stanley also advised on this transaction. The Sponsors’ lead
legal advisor was Simpson Thacher & Bartlett LLP.
The Sponsors have secured committed debt financing from Bank of America
Merrill Lynch, Barclays Capital Inc., JPMorgan Chase, Morgan Stanley and
KKR Capital Markets LLC. The agreement permits Del Monte to solicit
alternative proposals from third parties through January 8, 2011. The
Del Monte Foods board of directors, with the assistance of its advisors,
will actively solicit acquisition proposals during this period. There
can be no assurance this process will result in a higher offer. If
there is not a superior offer, the transaction is expected to close by
the end of March 2011, subject to customary closing conditions,
including receipt of shareholder and regulatory approvals. Del Monte
does not intend to disclose developments with respect to the
solicitation process unless and until the Board has made a decision.
Del Monte also announced today that it will no longer host a conference
call/webcast to discuss its fiscal 2011 second quarter results on
Thursday, December 2, 2010.
About Del Monte Foods
Del Monte Foods is one of the country’s largest and most well-known
producers, distributors and marketers of premium quality, branded pet
products and food products for the U.S. retail market, generating
approximately $3.7 billion in net sales in fiscal 2010. With a powerful
portfolio of brands, Del Monte products are found in eight out of ten
U.S. households. Pet food and pet snacks brands include Meow Mix(r),
Kibbles ‘n Bits(r), Milk-Bone(r), 9Lives(r), Pup-Peroni(r), Gravy
Train(r), Nature’s Recipe(r), Canine Carry-Outs (r) and other brand
names. Food product brands include Del Monte(r), Contadina(r), S&W(r),
College Inn(r) and other brand names. The Company also produces and
distributes private label pet products and food products. For more
information on Del Monte Foods Company (NYSE: DLM) visit the Company’s
website at www.delmonte.com.

Del Monte. Nourishing Families. Enriching Lives. Every Day.TM

About KKR
Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a
leading global alternative asset manager with $55.5 billion in assets
under management as of September 30, 2010. With over 650 people and 14
offices around the world, KKR manages assets through a variety of
investment funds and accounts covering multiple asset classes. KKR seeks
to create value by bringing operational expertise to its portfolio
companies and through active oversight and monitoring of its
investments. KKR invests in high-quality franchises across multiple
industries, including current and previous consumer and retail
investments such as Sealy, Dollar General, Pets at Home, Oriental
Brewery, WILD, Duracell, Gillette, RJR Nabisco and Safeway. KKR is
publicly traded on the New York Stock Exchange (NYSE: KKR). For
additional information, please visit KKR’s website at www.kkr.com.

About Vestar Capital Partners
Vestar is a leading international private equity firm specializing in
management buyouts and growth capital investments with $7 billion in
assets under management. The firm targets companies in the U.S. and
Europe in five key industry sectors: consumer, diversified industries,
healthcare, media/communication, and financial services. Current and
previous Vestar investments in consumer products companies include Birds
Eye Foods, Sun Products Corporation, Michael Foods, Remington Products
and Celestial Seasonings. Since the firm’s founding in 1988, the Vestar
funds have completed more than 67 investments in companies with a total
value of more than $30 billion. Vestar has operations in New York,
Boston, Denver, Milan, Munich, and Paris. For more information, please
visit Vestar’s website at http://www.vestarcapital.com/

About Centerview Partners
Centerview Partners operates a private equity business and an investment
banking advisory practice. Centerview’s private equity business is based
in Rye, New York and is focused exclusively on making investments in US
middle- and upper-middle market consumer businesses. With approximately
$500 million in committed capital, the firm seeks to leverage its
operational expertise and deep consumer industry relationships in
partnership with existing owners and management to achieve strategic and
operational excellence. More information about the firm is available at
www.centerviewpartners.com.