TreeHouse to buy Protenergy Natural Foods for $150m

TreeHouse Foods, a US-based food manufacturer, has agreed to acquire Protenergy Natural Foods from Whitecastle Investments, Whitecap Venture Partners and others, for around C$170m ($150m).

Protenergy, headquarterd in Ontario, Canada, produces food and beverage products such as carton and recart broth, soups and gravies for private label and corporate brands, and also serves as a co-manufacturer of national brands.

The company operates a second production facility in Cambridge, Maryland, US. Protenergy, which has around 300 employees, reported sales of approximately C$130m ($117.94m) for the twelve months ended 31 December 2013.

The transaction, which is expected to be completed in the second quarter of 2014, is subject to customary closing conditions.

TreeHouse Foods chairman, president and CEO Sam Reed said the acquisition of Protenergy will expand the company’s existing packaging capabilities and enable it to offer a full range of soup products.

"The addition of Protenergy is also expected to leverage our R&D capabilities in the evolution of shelf stable liquids from cans to cartons."

"Lastly, we believe Protenergy’s packaging applications present meaningful growth opportunities in the categories that we already play in today, as well as closely adjacent food and beverage categories," Reed added.

Protenergy Natural Foods CEO Kevin Tracey said the company is focused on delivering innovative product formulation, and exceptional processing and product quality to its customers.

"We see significant opportunities for innovation and growth in Tetra Recart packaging by leveraging the strengths of our two companies," Tracey added.

TreeHouse plans to finance the deal through borrowings under its existing credit facility.

The company expects the transaction to have approximately $0.05 to $0.07 EPS impact on 2014 earnings and add approximately $0.11 to $0.14 in EPS in 2015.