ConAgra Portfolio Firm with Pretzel - Analyst Blog
December 05 2011 - 3:00AM
Zacks
Food maker ConAgra Foods
Inc. (CAG) strengthened its portfolio by completing its
latest acquisition of pretzel maker National Pretzel Co. from
Brookstone Holdings.
According to the deal, ConAgra
Foods has acquired all assets of Lancaster, Pa. based National
Pretzel. The acquired assets include the HK Anderson and Shultz
labels, besides three bakeries located in Lancaster, Pa., Hanover,
Pa. and Visalia, Calif. Moreover, more than 700 National Pretzel
employees have officially been considered to join ConAgra
Foods.
The deal announced in November has
not yet disclosed its financial terms.
ConAgra Foods has been
significantly expanding its portfolio of businesses over a number
of years, focusing on branded, value-added opportunities, through
acquisition of a number of brands. Such acquisitions have been
adding depth and dynamism to its existing product line of
convenient meals, snacks and meal enhancers eventually. This
strategy of expansion continues with the latest possession of
Pretzel; which seems to have added another prestigious feather in
ConAgra’s honored cap.
Omaha, Nebraska based ConAgra Foods
Inc. is one of North America’s leading food companies, serving
grocery retailers, restaurants and other foodservice
establishments, with brands in 97% of America’s households. The
company, over time, has given tough competition to its peers, such
as HJ Heinz Co. (HNZ) and Kraft Foods
Inc. (KFT).
Discussing about the peers, the
company’s risk of shrinking market share also deserves a mention.
This downtrend has been observed over time, due to intense
competition from private label suppliers and producers. On this
backdrop, we believe that Pretzel acquisition is a significant step
for ConAgra to combat the above peril; alongside an optimistic
future potential for expanding and improving the foodmaker’s
business noticeably.
We hold a Neutral recommendation on
ConAgra over the long term. Currently, Conagra has a Zacks #3 Rank,
which implies a Hold rating in the short term (1-3 months).
CONAGRA FOODS (CAG): Free Stock Analysis Report
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KRAFT FOODS INC (KFT): Free Stock Analysis Report
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