Del Monte Foods to be acquired by KKR-led PE firms for $5.3 billion
26 Nov 2010
Del Monte Foods Company, the largest maker of branded food and pet products in the US, yesterday agreed to sell itself to a consortium of private equity firms led by Kohlberg Kravis Roberts & Co (KKR), for about $5.3 billion in cash.
Del Monte Foods, is no longer associated with the fruits and vegetables group Fresh Del Monte. Nor should the company be confused with Del Monte Pacific, the smallest of the various Del Monte brand-owning companies that operate around the world.
The acquisition of San Francisco, California-based Del Monte Foods is among the largest leveraged buyouts this year. It is also one of the biggest consumer-goods takeovers since private equity firm Carlyle Group bought vitamin and nutritional supplements maker NBTY for $3.8 billion in cash in July 2010. (See: Carlyle's $3.8-bn NBTY deal is year's largest LBO)
Founded in 1916, Del Monte Foods is the most well-known producers, distributors and marketers of premium quality, branded pet products and food products for the US retail market.
Its portfolio of brands include pet food and pet snacks like Meow Mix, Kibbles 'n Bits, Milk-Bone, 9Lives among others. It also sells canned fruits and vegetable under brands like Del Monte, Contadina, S&W and College Inn. The company, which claims that its products are found in eight out of 10 US households, also produces and distributes private label pet products and food products.
Del Monte Foods, which reported revenue of $3.74 billion in fiscal 2010, has been facing intense competition from branded and private-label rivals, although it did not take a hit during the recession as more people preferred to stay at home and dine.
Unlike other consumer food products companies, Del Monte Foods actually did well during the recession, by steadily increasing its revenues from $2.9 billion in 2007 to $3.2 billion in 2008 to $3.6 billion in 2009.
