ConAgra Foods Announces Agreement to Sell Gilroy Foods & Flavors’ Dehydrated & Vegetable Product Operations to Olam Interna...
June 07 2010 - 5:15PM
Business Wire
ConAgra Foods, Inc., (NYSE: CAG) announced today that it has
reached an agreement to sell its Gilroy Foods & Flavors
dehydrated and vegetable product operations to Olam International
for $250 million, subject to final working capital adjustments. The
seasoning blends and flavors business and supporting plant
operations will remain with ConAgra Foods’ Commercial Foods
reporting segment following the transaction closing.
Under the terms of the agreement, ConAgra Foods will sell
substantially all of the assets of Gilroy Foods & Flavors’
dehydrated garlic, onion, capsicum and Controlled MoistureTM,
GardenFrost®, Redi-MadeTM and fresh vegetable operations, all of
which are part of the Commercial Foods reporting segment. Sales for
those operations were approximately $300 million in fiscal 2010.
The transaction is expected to close within 30 to 60 days subject
to satisfaction of customary closing conditions, including normal
regulatory approvals, with ConAgra Foods continuing to operate the
business until that time.
“This announcement is part of ConAgra Foods’ ongoing strategy of
divesting non-core operations to continuously improve our focus,”
said Gary Rodkin, chief executive officer of ConAgra Foods. “As our
past portfolio changes have demonstrated, transactions like these,
along with our capital allocation discipline, have allowed us to
concentrate our resources behind the highest opportunity areas of
our company. Olam’s global leadership in food ingredients will
provide the Gilroy Foods & Flavors dehydrated and vegetable
products business more attention and resources for growth.”
Additional details of the transaction include:
- Manufacturing facilities that
are expected to transition to Olam’s ownership include: Gilroy,
Hanford and Modesto, Calif.; Fernley, Nev.; Las Cruces, N.M.; and
Umatilla, Ore. A warehouse in King City, Calif., is also included
in the sale. Upon the transaction closing, all current employees at
these locations will transition to Olam.
- Virtually all current employees
supporting the dehydrated and vegetable products business located
at the Omaha, Neb., headquarters and other satellite locations for
Gilroy Foods will transition to Olam.
- This agreement does not include
the Carol Stream, Ill., Cranbury, N.J., and Hyrum, Utah,
facilities, which produce seasoning blends and flavors. ConAgra
Foods will maintain full ownership of these plants and continue
operations as usual.
- Greg Estep, formerly president
of this business unit for ConAgra Foods, is expected to become
president of spices and dehydrates for Olam International.
- Paul Maass, president of ConAgra
Mills, will assume the additional responsibility of leading the
remaining seasoning blends and flavors business under the Spicetec
Flavors & Seasonings brand name.
ConAgra Foods plans to reclassify the financial results for
these operations from continuing operations into discontinued
operations for current and historical periods beginning with the
company’s fiscal 2010 fourth-quarter earnings release, which is
expected to be issued on June 24, 2010. The company’s long-term
financial guidance will not be altered by the completion of the
sale of the operations or the reclassification.
Olam International is a leading global integrated supply chain
manager and processor of agricultural products and food
ingredients, sourcing 20 products with a direct presence in 64
countries and supplying them to more than 10,600 customers. With
direct sourcing and processing in most major producing countries
for its various products, Olam has built a global leadership
position in many of its businesses, including cocoa, coffee,
cashew, sesame, rice, cotton and wood products. Headquartered in
Singapore and listed on the SGX-ST on Feb. 11, 2005, Olam currently
ranks among the top 40 largest listed companies in Singapore in
terms of market capitalization and is a component stock in the
Straits Times Index (STI), MSCI Singapore Free, S&P
Agribusiness Index and the DAXglobal Agribusiness Index. More
information on Olam can be found at www.olamonline.com.
ConAgra Foods, Inc., (NYSE: CAG) is one of North America’s
leading food companies, with brands in 96 percent of America’s
households. Consumers find Banquet, Chef Boyardee, Egg Beaters,
Healthy Choice, Hebrew National, Hunt’s, Marie Callender’s, Orville
Redenbacher’s, PAM, Peter Pan, Reddi-wip and many ConAgra Foods
brands in grocery, convenience, mass merchandise and club stores.
ConAgra Foods also has a strong business-to-business presence,
supplying potato, other vegetable, spice and grain products to a
variety of well-known restaurants, foodservice operators and
commercial customers. For more information, please visit us at
www.conagrafoods.com.
Note on forward-looking statements:This release contains
forward-looking statements. These statements are based on
management's current views and assumptions of future events and
financial performance and are subject to uncertainty and changes in
circumstances. The company undertakes no responsibility for
updating these statements. Readers of this release should
understand that these statements are not guarantees of performance
or results. Many factors could affect the company's actual
financial results and cause them to vary materially from the
expectations contained in the forward-looking statements. These
factors include, among other things: availability and prices of raw
materials; the impact of the accident at the Garner, N.C.,
manufacturing facility, including the ultimate costs incurred and
the amounts received under insurance policies; product pricing;
future economic circumstances; industry conditions; the company's
ability to execute its operating plans; the success of the
company's innovation, marketing, and cost-saving initiatives; the
competitive environment and related market conditions; operating
efficiencies; the ultimate impact of the company's recalls; access
to capital; actions of governments and regulatory factors affecting
the company's businesses, including the Patient Protection and
Affordable Care Act; the amount and timing of repurchases of the
company's common stock, if any; the ability to successfully
complete the sale of the Gilroy dehydrated and vegetable products
business; an increase or decrease in the impairment charge required
in connection with the sale of the Gilroy dehydrated and vegetable
products business; and other risks described in the company's
reports filed with the Securities and Exchange Commission. The
company cautions readers not to place undue reliance on any
forward-looking statements included in this release, which speak
only as of the date made.
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