Del Monte considers sale of canned food business

American food production and distribution company Del Monte is evaluating plans to sell its canned food business as part of its strategy to focus on its pet food business.

The canned food division produces canned vegetables, fruit cups and soup broths and has sales of about $1.8bn annually, which represents half of the company’s revenues.

The process is in the advanced stages and the company is gauging interest from potential buyers of the division, reports The Wall Street Journal, citing sources familiar with the matter.

Del Monte has appointed Centerview Partners and Morgan Stanley to assist in the sale of the business, the sources said.

The proposed sale could fetch the company about $2bn and will allow it to focus solely on its pet food business, which includes brands such as Milk-Bone and Kibbles ‘n Bits.

In May 2013, Del Monte entered into a merger agreement with Natural Balance Pet Foods, a manufacturer of pet food for dogs and cats that is sold throughout North America, Europe and Asia.

Del Monte then said that the deal is in line with its long-term strategy to further strengthen its pet food and snacks brand portfolio.

For the third quarter of 2013, the company reported net income of $28.3m, while net sales totalled $1.02bn.

In June 2012, Del Monte acquired the assets of bankrupt Snokist Growers, a Washington-based fruit processing cooperative.

In 2011, Del Monte Foods was acquired by an investor group led by funds affiliated with Kohlberg Kravis Roberts, Vestar Capital Partners and Centerview Capital in a deal worth approximately $4bn.