TreeHouse closes acquisition of Sturm Foods

TreeHouse closes acquisition of Sturm Foods

TreeHouse Foods Inc. said Tuesday that it has completed its $660 million acquisition of Sturm Foods Inc., a private label manufacturer of hot cereal and powdered soft drink mixes in Manawa in Outagamie County.

Westchester, Ill.-based TreeHouse financed the acquisition through the closing of its previously announced offerings of $400 million in aggregate principal amount of 7.75 percent senior notes due 2018 and 2.7 million shares of common stock at a price of $43.00 per share. TreeHouse financed the remainder of the purchase price under its existing revolving credit facility.

TreeHouse Foods chairman and CEO Sam Reed has said that the acquisition of Sturm will give TreeHouse leadership position within the private label hot cereal and powdered soft drink mix categories.

Sturm had sales of $340 million for the 12 months ended Sept. 30. Following the acquisition, TreeHouse will have sales of about $1.9 billion and adjusted earnings before taxes and expenses of more than $275 million. TreeHouse has said it expects the addition of Sturm to boost annual earnings by more than 16 percent, adding 38 to 40 cents per share.

Founded in 1905, Sturm Foods has 750 employees and operates three facilities in Manawa. The company sells to both retail and food service customers. The bulk of its product portfolio is evenly mixed between hot cereals and powdered soft drink mixes. The remainder of its portfolio consists of other dry mix products.

TreeHouse (NYSE: THS) is a producer of pickles, nondairy creamer, soups, sauces and condiments. Bay Valley Foods, a manufacturer of powdered creamer, pickles, condiments and other food products with operations in Green Bay, is the major operating division of TreeHouse Foods.