Del Monte Foods Company (NYSE: DLM) and an investor group led by
funds affiliated with Kohlberg Kravis Roberts & Co. L.P.
(“KKR”), Vestar Capital Partners (“Vestar”) and Centerview Partners
(“Centerview”) – collectively the “Sponsors”– today announced that
they have signed a definitive agreement under which the Sponsors
will acquire Del Monte for $19.00 per share in cash.
The transaction, which was unanimously approved by Del Monte’s
board of directors, is valued at approximately $5.3 billion,
including the assumption of approximately $1.3 billion in net debt.
This price represents a premium of approximately 40 percent over
Del Monte’s average closing share price during the past three
months prior to November 18, 2010, when market rumors of a
transaction began, and is also higher than any price the Company’s
stock has ever achieved.
“This transaction delivers substantial shareholder value and is
a clear endorsement of Del Monte’s strategic success and effective
execution. The hard work and dedication of our talented team has
helped to transform Del Monte from a $1 billion consumer foods
business into a branded pet and consumer products company with more
than $3.7 billion in revenues,” said Richard G. Wolford, Chairman
and CEO of Del Monte Foods. “This transaction will enable our
Company to continue to successfully grow, building on the
foundation our team has put into place. We are excited about the
ability to deliver substantial returns to our shareholders, as well
as great prospects for Del Monte employees, customers and
consumers.”
Simon Brown, Member of KKR and head of the firm’s North American
Consumer practice, stated, “Del Monte has a first-rate brand
portfolio and excellent reputation for providing high quality and
nutritious products to families and their pets. We look forward to
working with the Company’s talented employees and investing in the
business as we continue to execute upon Del Monte’s proven strategy
for growth. Del Monte is a great company, with an excellent
strategy, a talented team and a strong future.”
Brian Ratzan, Managing Director and head of Vestar’s Consumer
group said, “Del Monte Foods is a terrific company with iconic
consumer and pet brands. Storied consumer franchises like Del
Monte’s – with great brands in growing categories – will continue
to thrive through investments in innovation and
marketing. Vestar looks forward to working with the Del Monte
team and our strategic partners to achieve the Company’s next phase
of growth.”
“Over the last decade, Rick and the entire Del Monte team have
built a unique platform based on powerful brands,” said Jim Kilts,
Centerview’s co-founder and former CEO of Kraft, Nabisco and
Gillette. “We are truly excited to partner with Del Monte as the
Company continues to build on its rich heritage of delivering high
quality products to consumers at attractive prices.”
Del Monte plans to maintain a corporate presence in both the San
Francisco Bay Area and Pittsburgh, with its corporate headquarters
continuing to be located in San Francisco.
Barclays Capital Inc. served as financial advisor to Del Monte
Foods and provided a fairness opinion in connection with the
transaction. Perella Weinberg Partners LP also provided a fairness
opinion in connection with the transaction. Gibson Dunn &
Crutcher LLP served as legal advisor to the Company in connection
with this transaction.
Centerview Partners acted as lead financial advisor to the
Sponsors in this transaction. Bank of America Merrill Lynch, J.P.
Morgan Securities and Morgan Stanley also advised on this
transaction. The Sponsors’ lead legal advisor was Simpson Thacher
& Bartlett LLP.
The Sponsors have secured committed debt financing from Bank of
America Merrill Lynch, Barclays Capital Inc., JPMorgan Chase,
Morgan Stanley and KKR Capital Markets LLC. The agreement permits
Del Monte to solicit alternative proposals from third parties
through January 8, 2011. The Del Monte Foods board of directors,
with the assistance of its advisors, will actively solicit
acquisition proposals during this period. There can be no assurance
this process will result in a higher offer. If there is not a
superior offer, the transaction is expected to close by the end of
March 2011, subject to customary closing conditions, including
receipt of shareholder and regulatory approvals. Del Monte does not
intend to disclose developments with respect to the solicitation
process unless and until the Board has made a decision.
Del Monte also announced today that it will no longer host a
conference call/webcast to discuss its fiscal 2011 second quarter
results on Thursday, December 2, 2010.
About Del Monte Foods
Del Monte Foods is one of the country’s largest and most
well-known producers, distributors and marketers of premium
quality, branded pet products and food products for the U.S. retail
market, generating approximately $3.7 billion in net sales in
fiscal 2010. With a powerful portfolio of brands, Del Monte
products are found in eight out of ten U.S. households. Pet food
and pet snacks brands include Meow Mix®, Kibbles 'n Bits®,
Milk-Bone®, 9Lives®, Pup-Peroni®, Gravy Train®, Nature’s Recipe®,
Canine Carry-Outs ® and other brand names. Food product brands
include Del Monte®, Contadina®, S&W®, College Inn® and other
brand names. The Company also produces and distributes private
label pet products and food products. For more information on Del
Monte Foods Company (NYSE: DLM) visit the Company’s website at
www.delmonte.com.
Del Monte. Nourishing Families. Enriching Lives. Every
Day.TM
About KKR
Founded in 1976 and led by Henry Kravis and George Roberts, KKR
is a leading global alternative asset manager with $55.5 billion in
assets under management as of September 30, 2010. With over 650
people and 14 offices around the world, KKR manages assets
through a variety of investment funds and accounts covering
multiple asset classes. KKR seeks to create value by bringing
operational expertise to its portfolio companies and through active
oversight and monitoring of its investments. KKR invests in
high-quality franchises across multiple industries, including
current and previous consumer and retail investments such as Sealy,
Dollar General, Pets at Home, Oriental Brewery, WILD, Duracell,
Gillette, RJR Nabisco and Safeway. KKR is publicly traded on the
New York Stock Exchange (NYSE: KKR). For additional information,
please visit KKR's website at www.kkr.com.
About Vestar Capital
Partners
Vestar is a leading international private equity firm
specializing in management buyouts and growth capital investments
with $7 billion in assets under management. The firm targets
companies in the U.S. and Europe in five key industry sectors:
consumer, diversified industries, healthcare, media/communication,
and financial services. Current and previous Vestar investments in
consumer products companies include Birds Eye Foods, Sun Products
Corporation, Michael Foods, Remington Products and Celestial
Seasonings. Since the firm’s founding in 1988, the Vestar funds
have completed more than 67 investments in companies with a total
value of more than $30 billion. Vestar has operations in New York,
Boston, Denver, Milan, Munich, and Paris. For more information,
please visit Vestar’s website at http://www.vestarcapital.com/
About Centerview
Partners
Centerview Partners operates a private equity business and an
investment banking advisory practice. Centerview’s private equity
business is based in Rye, New York and is focused exclusively on
making investments in US middle- and upper-middle market consumer
businesses. With approximately $500 million in committed capital,
the firm seeks to leverage its operational expertise and deep
consumer industry relationships in partnership with existing owners
and management to achieve strategic and operational excellence.
More information about the firm is available at
www.centerviewpartners.com.
Cautionary Statement Regarding
Forward-Looking Statements
This press release contains forward-looking statements.
Statements that are not historical facts, including statements
about beliefs or expectations, are forward-looking statements.
These statements are based on plans, estimates and projections at
the time Del Monte Foods Company makes the statements and readers
should not place undue reliance on them. In some cases, readers can
identify forward-looking statements by the use of forward-looking
terms such as "may," "will," "should, "expect," "intend," "plan,"
"anticipate," "believe," "estimate," "predict," "potential," or
"continue" or the negative of these terms or other comparable
terms. Forward-looking statements involve inherent risks and
uncertainties and the Company cautions readers that a number of
important factors could cause actual results to differ materially
from those contained in any such forward-looking statement. Factors
that could cause actual results to differ materially from those
described in this press release include, among others:
uncertainties as to the timing of the acquisition; the possibility
that competing offers will be made; the possibility that various
closing conditions for the acquisition may not be satisfied or
waived, including that a governmental entity may prohibit or refuse
to grant approval for the consummation of the acquisition; general
economic and business conditions; and other factors. Readers are
cautioned not to place undue reliance on the forward-looking
statements included in this press release, which speak only as of
the date hereof. The Company does not undertake to update any of
these statements in light of new information or future events.
Additional Information and Where to
Find It
In connection with the proposed merger, Del Monte Foods Company
will prepare a proxy statement to be filed with the SEC. When
completed, a definitive proxy statement and a form of proxy will be
mailed to the stockholders of the Company. THE COMPANY'S SECURITY
HOLDERS ARE URGED TO READ THE PROXY STATEMENT REGARDING THE
PROPOSED MERGER BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. The
Company's stockholders will be able to obtain, without charge, a
copy of the proxy statement (when available) and other relevant
documents filed with the SEC from the SEC's website at
http://www.sec.gov. The Company's stockholders will also be able to
obtain, without charge, a copy of the proxy statement and other
relevant documents (when available) by directing a request by mail
or telephone to Del Monte Foods Company, Attn: Corporate Secretary,
P.O. Box 193575, San Francisco, California 94119-3575, telephone:
(415) 247-3000, or from the Company’s website,
http://www.delmonte.com.
The Company and its directors and officers may be deemed to be
participants in the solicitation of proxies from the Company's
stockholders with respect to the proposed merger. Information about
the Company's directors and executive officers and their ownership
of the Company's common stock is set forth in the proxy statement
for the Company's 2010 Annual Meeting of Stockholders, which was
filed with the SEC on August 16, 2010. Stockholders may obtain
additional information regarding the interests of the Company and
its directors and executive officers in the proposed merger, which
may be different than those of the Company's stockholders
generally, by reading the proxy statement and other relevant
documents regarding the proposed merger, when filed with the
SEC.
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