ConAgra Foods Inc. (CAG) agreed to acquire Del Monte Canada Inc. from an affiliate of private equity firm Sun Capital Partners Inc., as the packaged food company looks to grow its core businesses and improve its international presence.
Financial terms weren't disclosed. The deal includes the acquisition of all Del Monte branded packaged fruit, fruit snacks and vegatable products in Canada as well as Aylmer tomato products.
Chief Executive Gary Rodkin said the deal will also help the company grow its position in North American tomato products, expand its vegetable product line and add packaged fruit and fruit snacks to its portfolio.
Del Monte Canada had about $150 million in revenue in fiscal 2011.
ConAgra is hoping to make a bigger splash in the private-label arena, where it sees more growth potential. After failing to acquire Ralcorp Holdings Inc. (RAH), a large private-label company that makes ready-to-eat food and snacks, ConAgra is hunting for acquisitions in the space. It recently bought a private-label pretzel maker for $300 million.
Last month, ConAgra said fiscal second-quarter earnings fell 14% after being hit with hedging losses, and said its consumer-foods unit was hurt by rising commodities costs.
Shares rose by 9 cents to $26.94 in recent trading. The stock is up 17% in the past 12 months.
-By Nathalie Tadena, Dow Jones Newswires; 212-416-3287; firstname.lastname@example.org