Sanofi-Aventis to Buy Chattem, Maker of Icy Hot, for About $1.9 Billion
Alberto Culver acquires Simple Health & Beauty Limited
Diedrich Coffee Inc. Tuesday said it agreed to be acquired by Green Mountain Coffee Roasters Inc., a deal which follows more than a monthlong bidding war for the single-serve coffee brand.
Under the deal, Green Mountain will acquire all of the outstanding shares of Diedrich for $35 in cash per share, or about $290 million.
Diedrich Coffee said it terminated a merger agreement with Peet's Coffee & Tea Inc. and that Green Mountain has paid Peet's the $8.517 million termination fee on behalf of Diedrich Coffee.
Peet's, which sells premium coffee and teas, was pursuing Diedrich to try to get a foothold into the fast-growing single-serve coffee market in the form of K-Cups, plastic pods used in Keurig coffee machines. The machines have exploded in popularity in recent years, as they offer a convenient way to brew a cup of coffee from a choice of flavors. Over the last year, Keurig shipped 1.6 billion K-Cup portion packs, up 63% from last year.
The Keurig technology is owned by Green Mountain, which appears to want to bring more of the brands licensed to sell K-Cups under its wings. Green Mountain recently bought a separate coffee brand, Timothy's Coffee of the World Inc., for $157 million.
Peet's had raised its bid to $32.50, but that offer expired, leaving the bid at $26. Peet's said late Monday that it wouldn't raise its offer. Peet's Chief Executive Patrick O'Dea said that Peet's deal could close in weeks while antitrust issues raised by a deal with Green Mountain remains subject to review.
However, analysts have said risk of the Green Mountain deal violating antitrust laws is minimal, because consumers have several other options for in-home coffee brewing besides the Keurig single-cup brewers Green Mountain and Diedrich provide.
Peet's failed to submit a new proposal to Diedrich Coffee by the Monday deadline, Diedrich Coffee said.
Procter & Gamble. is close to a deal to buy Sara Lee.'s European air-freshener business, after fending off a challenge from S.C. Johnson & Son Inc., according to people familiar with the matter.
A deal is likely to be signed in the next few days, they said. While the price is not clear, people familiar with the matter have said in the past that the business could fetch as much as $700 million.
The sale of the Sara Lee operation, which includes the Ambi Pur brand and has roughly $500 million of global annual sales, would bring Sara Lee a step closer to its nearly yearlong goal of selling its international household and personal-care products businesses.
Sara Lee had hoped to sell the businesses as one, but has been forced to sell them in pieces instead. In September, Sara Lee reached a deal to sell the personal-care unit to Anglo-Dutch consumer-products company Unilever NV for about $1.9 billion.
The air-freshener deal would leave Sara Lee with two chunks of the international businesses left to sell: Kiwi shoe polish and an insecticide maker. Closely held S.C. Johnson, which was told last week that its bid was rejected according to the people, may still buy other parts of the Sara Lee business.
Sara Lee, which officially put the international division up for sale earlier this year, declined to comment, as did P&G. An official for S.C. Johnson, which is based in Racine, Wis., couldn't immediately be reached.
Celgene acquires Gloucester Pharmaceuticals
They are still known as "the boys" around J.M. Smucker Co., the 112-year-old maker of fruit jams and peanut butter. Brothers Tim and Richard Smucker grew up around the family business, listening to their dad talk shop at the breakfast table, and as teenagers loading trucks and mopping jelly off factory floors. As they grew older, taking jobs in the finance and marketing departments, they eventually would form an unusual partnership that has elevated the company from small-town beginnings in Orrville, Ohio, to power player in the food world.
Several large deals were done on the brothers' watch in the past six years. But the $3.7 billion purchase of the Folgers coffee brand from Buckeye State neighbor Procter & Gamble stands out from the rest.
It couldn't have been timed better. Closed a year ago, the deal put the first billion-dollar franchise into Smucker's pantry, adding coffee to a lineup that was stocked with names like Hungry Jack pancake mixes, Pillsbury cake icing, and Jif peanut butter.
Mergers often fail to reward investors as promised. Under the brothers, however, J.M. Smucker /quotes/comstock/13*!sjm/quotes/nls/sjm (SJM 58.98, -0.52, -0.87%) delivered this year with Folgers, investors and analysts say. Folgers sales have grown by a percentage in the "high single digits" and topped most expectations. Growth kicked in last spring, when Folgers sales surged after a flat, and at times declining, year. In the past two quarters, Folgers volumes have risen by 9% and 5%, respectively.
"We have to give it high marks," Chuck Cerankosky, a NorthCoast Research analyst, said of the performance.
By turning their biggest acquisition yet into a success, delivering to shareholders sweet gains in a sour climate, and stressing ethics in their oft-praised workplace, the Smucker brothers are the co-winners of MarketWatch's CEO of the Year for 2009.
They've been spooning out good results all year long. And Smucker gave investors more to nibble on recently when it lifted the long-term operating-margin forecast for the Folgers business by two percentage points to 30%. For the country's legions of cash-strapped consumers, Smucker cut the price of the brand's familiar red canisters of coffee.
For brand-name-packaged-food makers during the recession, volume growth has been hard to come by, as retailers have cut inventories and Americans have pulled the purse strings ever tighter.
Having Folgers in house has only strengthened Smucker's ability to respond, as cross promotions have spurred demand for Hungry Jack pancake mixes and syrups, the company's namesake jams, Pillsbury bake mixes and Jif.
Not counting the Folgers side of the house, Smucker also achieved modest volume-growth pickups this year in the second and third quarters. Hungry Jack, Jif, Pillsbury, and Crisco have led the way. The struggle for growth at other food companies, including the likes of H.J. Heinz, Hormel, Sara Lee and Kraft, has been less successful.
With the boys presiding, Smucker sales have grown fivefold through acquisitions over the past six years, thrusting the Orrville food purveyor into the No. 1 market-share position in 10 different categories in the central aisles of America's grocery stores.
When it came to getting their hands on Folgers, the brothers had their work cut out for them in persuading P&G /quotes/comstock/13*!pg/quotes/nls/pg (PG 61.88, -0.59, -0.94%) to sell Smucker a business it had long coveted to complement its breakfast and dessert offerings.
P&G had publicly stated its intention to make Folgers a stand-alone outfit and was working with its bankers to achieve that goal. It took four months for the Smuckers to sell P&G on the argument that their proposition was a more compelling one. After that, they had to win back investors who'd punished Smucker in the weeks after the deal was unveiled.
Once the acquisition was completed, however, the brothers moved swiftly to cash in on the Folgers name.
Tim and Richard Smucker, the brothers who helm the 112-year-old spread company that bears their name, are sharing the honor of being MarketWatch CEO of the Year in 2009. They are recognized for several successful deals, particularly the $3.7 billion purchase of the Folgers coffee brand from Procter & Gamble in 2008.
Novartis, Incyte in potential $1.3B drug-licensing deal
Birds Eye Foods, the largest frozen-vegetable company in the U.S., is expected to be acquired for more than $1.3 billion by Pinnacle Brands Corp., according to people familiar with the matter.
The all-cash deal is likely to be announced as soon as Thursday, said these people. Pinnacle, owned by New York's Blackstone Group, is one of the country's largest packaged-food companies with well-known consumer brands such as Duncan Hines baking mixes and Swanson frozen dinners.
The Rochester, New York-based Birds Eye, known for its branded frozen vegetables and frozen meals, is majority owned by the private-equity firm Vestar Capital Partners. It is also 40% owned by Pro-Fac, a 48-year-old New York agricultural cooperative. Birds Eye carries about $700 million in long-term debt.
Acquired by Vestar in 2002, Birds Eye is sold in most of the country's largest grocery stores, including Wal-Mart, Kroger and Safeway. Birds Eye, which has about 1700 full-time employees, has a dominant niche in warehouses and distribution centers across the Midwest in states including Michigan, Minnesota and Wisconsin.
Representatives for Blackstone and Birds Eye did not reply to phone calls and emails seeking comment.
The New Jersey-based Pinnacle was acquired by Blackstone in 2007 for $2.2 billion. It houses names common with consumers such as Vlasic pickles, Mrs. Butterworth pancake syrup and Open Pit barbeque sauce.
For the first nine months of the year, Pinnacle frozen foods with about 25 percent of the frozen-vegetable market in the United States. It has
reported net earnings of $10.8 million on sales of $1.23 billion.
The all-cash deal is yet another sign that private-equity funds have become more willing to make acquisitions after a tumultuous two-year period. Many private-equity funds are also eager to sell off businesses, having delivered few returns during the freeze in the credit and merger markets.
The purchase may also be another signal that lenders are willing to lend at higher leverage levels. In early November IMS Health agreed to a $4 billion private-equity leveraged buyout at five times earnings, a higher level than had been considered reasonable this year.
S.C. Johnson Vies with P&G for Sara Lee Unit
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