Sun Capital Partners is selling Del Monte Canada to ConAgra Foods. An affiliate of EG Capital Group, a New York-based consumer-focused private equity firm, will also sell its minority stake in Del Monte Canada as part of the transaction.
Sun Capital Partners, Inc. (“Sun Capital,”) a leading private investment firm specializing in leveraged buyouts and investments in market-leading companies, today announced that its affiliated portfolio company Del Monte Canada, the market leader in packaged fruit and tomatoes in Canada, has agreed to be purchased by ConAgra Foods (NYSE: CAG,) one of North America’s leading food companies. An affiliate of EG Capital Group, LLC, a New York-based consumer-focused private equity firm, will also sell its minority stake in Del Monte Canada as part of the transaction. Terms of the transaction were not disclosed.
The agreement with ConAgra Foods includes the sale of all Del Monte-branded packaged fruit and vegetable products, as well as Aylmer tomato products, a manufacturing facility in Dresden, Ontario, and the Company’s headquarters offices in Canada.
Del Monte Canada, built from a collection of underperforming, non-core food businesses operated by Kraft and previously known as CanGro Foods, was acquired by a Sun Capital affiliate in January 2006. Following the acquisition, Sun Capital launched a new business model to reposition operations more competitively as a sales and marketing business with international production facilities. Contributing to the successful turnaround of the business, company management focused consistently on driving product innovation, including the introduction of roll-up and frozen fruit snacks and transitioning to plastic packaging instead of using metal cans. Del Monte Canada also started focusing on higher-margin products, and in 2010 adopted its current name to better reflect the repositioned company. As a result of all efforts, Del Monte’s performance dramatically improved over the past five years, from a money losing business to a highly profitable company today.
“Del Monte Canada is a classic example of a successful carve-out of a non-core business, and the execution of a focused plan to develop the business to realize its potential,” said Marc Leder, Co-CEO at Sun Capital Partners. “We took an unprofitable business and reinvented it by tapping into the underlying brand value and keeping a focus on innovation and the consumer’s needs. Today, Del Monte Canada is a profitable business well positioned for future growth. ConAgra Foods is an ideal owner for this business given their expertise in the tomato category and their presence in Canada.”
The transaction marks the second time that Sun Capital has sold successfully an affiliate to ConAgra Foods. In April 2010, ConAgra Foods purchased Elan Nutrition, a contract developer and manufacturer of nutritional bars serving the health and wellness, meal replacement, sport nutrition, energy bar and nutraceuticals markets.
Sun Capital has significant prior experience in the food, foodservice and seafood sectors through its affiliated portfolio companies, including Creekstone Farms Premium Beef, a leading processor of the highest quality Black Angus beef; Harry’s Fresh Foods, a producer of premium home-style refrigerated foods for the retail and foodservice markets; and Sunrise Growers-Frozsun, a leading value-added supplier of frozen and fresh strawberry products.
Harris Williams & Co. acted as the exclusive advisor to Del Monte Canada.
About Sun Capital Partners, Inc.
Sun Capital Partners, Inc. is a leading private investment firm focused on leveraged buyouts, equity, debt, and other investments in companies that can benefit from its in–house operating professionals and experience. Sun Capital affiliates have invested in more than 285 companies worldwide with combined sales in excess of $45 billion since Sun Capital’s inception in 1995. Sun Capital has offices in Boca Raton, Los Angeles, and New York, as well as affiliates in London, Paris, Frankfurt, Luxembourg, Shanghai and Shenzhen. Sun Capital Partners Sourcing, LLC has dedicated teams in Shanghai and Shenzhen, China, that assist affiliated portfolio companies in developing an offshore sourcing plan. It provides logistical support and works with affiliates to develop their in-house skills to handle this function and maximize their potential savings in sourcing.
About ConAgra Foods
ConAgra Foods, Inc., (NYSE: CAG), is one of North America’s leading food companies, with brands in 97 percent of America’s households. Consumers find Banquet, Chef Boyardee, Egg Beaters, Hebrew National, Hunt’s, Marie Callender’s, Orville Redenbacher’s, PAM, Peter Pan, Reddi-wip, Slim Jim, Snack Pack and many other ConAgra Foods brands in grocery, convenience, mass merchandise and club stores. ConAgra Foods also has a strong business-to-business presence, supplying frozen potato and sweet potato products as well as other vegetable, spice and grain products to a variety of well-known restaurants, foodservice operators and commercial customers.
About Del Monte Canada
Del Monte Canada, is the market leader in canned fruit and tomatoes in Canada, and is No. 2 in the nation in canned vegetables sold under the Del Monte and Aylmer brands. The company, based in Toronto, also leads in the refrigerated fruit and fruit snack categories with the Del Monte brand while sub-licensing the Del Monte brand to Nestlé Canada Inc. for frozen fruit novelties.