TreeHouse Foods has entered into an agreement with TorQuest Partners to acquire Associated Brands GP Corporation (Associated Brands), a private label manufacturer of powdered drinks, specialty teas and sweeteners, for C$187 million (US$180 million) in cash.
The transaction is expected to close in the third quarter of 2013 and will be financed through borrowings under TreeHouse’s existing $750 million credit facility.
TorQuest’s initial investment in Associated Brands was in November 2005 when Associated Brands was a publicly traded company. TorQuest took the company private in May 2007.
“We have enjoyed our partnership with Associated Brands since acquiring the company in 2007 and are proud of the progress it has made,” said Eric Berke, Chairman of Associated Brands and Managing Partner of TorQuest Partners. “Through this transaction, we are placing Associated Brands into the hands of an outstanding strategic buyer and will complete a successful investment on behalf of our investors.”
Associated Brands is a manufacturer and supplier of private-label dry blend food and household products that sells to 45 of the 50 largest North American food retailers. The company’s principal focus is on manufacturing dry blend food products such as flavored drink mixes, iced tea, hot chocolate drinks, dessert mixes, soups, bouillon, side dishes and sweeteners. Associated Brands is one of the three largest suppliers of private-label dry-blend food products in North America, producing over eleven million cases annually. The company had sales of approximately $200 million for the twelve months ended June 30, 2013. Associated Brands operates three production facilities in Delta, BC; Medina, NY; and Toronto, ON. The company is headquartered in Mississauga, ON and has approximately 650 employees (www.associatedbrands.com).
TreeHouse Foods (NYSE: THS) was formed in 2005 when Dean Specialty Foods was spun off from Dean Foods. Since 2005 the company has completed seven add-on acquisitions. Today, TreeHouse is a food manufacturer servicing primarily the retail grocery and foodservice distribution channels. Products include non-dairy powdered creamers, private label canned soups, refrigerated and shelf stable salad dressings and sauces, powdered drink mixes and single serve hot beverages, hot cereals, macaroni and cheese, skillet dinners, Mexican sauces, jams and pie fillings, pickles and related products, aseptic sauces, and liquid non-dairy creamer. TreeHouse Foods is headquartered in Oakbrook, IL (www.treehousefoods.com).
TorQuest Partners makes equity investments of C$20 million to C$80 million in companies with enterprise values of C$40 million to C$250 million that are located in Canada. The firm invests in a range of industries but has a particular interest in manufacturing, business services, financial services, food, consumer products and specialty chemicals. TorQuest was founded in 2002 and has over C$1 billion of equity capital under management. The firm is headquartered in Toronto (www.torquest.com).
Wells Fargo Securities is acting as financial advisor to TreeHouse on the transaction. BMO Capital Markets is serving as financial advisor to Associated Brands and TorQuest Partners.
© 2013 PEPD • Private Equity’s Leading News Magazine • 8-8-13
