TreeHouse Foods Completes the Purchase of E.D. Smith Income Fund
October 15 2007 - 4:32PM
PR Newswire (US)
WESTCHESTER, Ill., Oct. 15 /PRNewswire-FirstCall/ -- TreeHouse
Foods, Inc. (NYSE:THS) ("TreeHouse") today announced that they have
completed their purchase of E.D. Smith Income Fund (the "Fund").
E.D. Smith is the leading supplier of private label salad dressings
in Canada and the U.S. It also markets E.D. Smith branded jams,
jellies and pie fillings and other private label products in
Canada. The company markets and distributes its products to the
food retail and foodservice markets in Canada and the U.S. As
announced on June 25, 2007, TreeHouse agreed to acquire all of the
operating assets of the Fund for CAN$9.15 per share or
approximately $220 million, plus the assumption of approximately
$100 million in existing net debt and transaction costs. The all
cash transaction was financed through borrowings under the
TreeHouse's existing $600 million credit facility. "E.D. Smith
opens access to both new geography and new product categories",
said Sam K. Reed, Chairman and CEO of TreeHouse Foods, Inc. "The
name 'E.D. Smith' is renowned in the world of private label foods
where its reputation sets the standard in strategic alignment and
cooperation with grocery customers. We will benefit greatly on both
sides of the border from EDS, not only in opening markets, but also
in extending our scope as an industry leader." TreeHouse President
and COO David Vermylen further expects the acquisition to deliver
four key benefits: -- "First, in the U.S., where EDS does 40% of
its business, it adds a fourth $100 million business to our U.S.
retail dry grocery portfolio -- salad dressing. Salad dressings are
a large, growing category associated with healthy eating. E.D.
Smith is the private label salad dressings market leader in the
U.S. with an estimated 60%+ share and is recognized as the private
label category innovator. Our focus in the U.S. will be on pourable
dressings. We want to be the best, most innovative private label
salad dressings company in the nation. -- Second, in Canada where
EDS does 60% of its business, it is the private label market leader
in nine categories and has outstanding relationships with all the
key retailers. We will continue to build that business and add Bay
Valley's U.S. categories to E.D. Smith's product portfolio, thus
leveraging their account penetration with key customers. -- Third,
E.D. Smith has a very solid food service business in Canada but
only a limited presence in the U.S. Its specialty sauces food
service portfolio is a perfect fit with Bay Valley's pickle, cheese
sauce and salsa business. -- Fourth, beyond the revenue synergies,
we see significant cost synergies across the entire supply chain as
we leverage the combined size of E.D Smith and our legacy
businesses." For the 12 months ending December 31, 2007, E.D. Smith
is expected to generate revenues of approximately $300 million.
E.D. Smith operates production facilities in Winona, Ontario,
Seaforth, Ontario, Cambridge, Ontario and North East, Pennsylvania,
and employs approximately 800 people. The E.D. Smith headquarters
will remain in Winona, Ontario. TreeHouse has re-affirmed that E.D.
Smith is expected to contribute approximately $0.07 per share on an
annualized basis but will only contribute $0.01 per share of
operating earnings in the fourth quarter of 2007 based on the
closing date of the transaction. These earnings estimates will be
reduced by one-time acquisition accounting adjustments and
integration activities of approximately $0.07 in the fourth quarter
and $0.02 in 2008. Conference Call A webcast to discuss the
agreement to acquire the businesses will begin at 8:30 a.m. EDT on
Tuesday, October 16, 2007. It may be accessed by visiting the
"Webcast" section of the company website at
http://www.treehousefoods.com/. About TreeHouse Foods TreeHouse is
a food manufacturer servicing primarily the retail grocery and
foodservice channels. Its products include pickles and related
products; non-dairy powdered coffee creamer; private label soup and
infant feeding products, salsa, Mexican sauces and other food
products including aseptic sauces, refrigerated salad dressings,
and liquid non-dairy creamer. TreeHouse believes it is the largest
manufacturer of pickles and non-dairy powdered creamer in the
United States based on sales volume. FORWARD LOOKING STATEMENTS
This press release contains "forward-looking statements."
Forward-looking statements include all statements that do not
relate solely to historical or current facts, and can generally be
identified by the use of words such as "may," "should," "could,"
"expects," "seeks to," "anticipates," "plans," "believes,"
"estimates," "intends," "predicts," "projects," "potential" or
"continue" or the negative of such terms and other comparable
terminology. These statements are only predictions. The outcome of
the events described in these forward-looking statements is subject
to known and unknown risks, uncertainties and other factors that
may cause the company or its industry's actual results, levels of
activity, performance or achievements to be materially different
from any future results, levels of activity, performance or
achievement expressed or implied by these forward-looking
statements. TreeHouse's Annual Report on Form 10K for the fiscal
year ended December 31, 2006 and subsequent quarterly reports
discuss some of the factors that could contribute to these
differences. You are cautioned not to unduly rely on such
forward-looking statements, which speak only as of the date made,
when evaluating the information presented in this presentation. The
company expressly disclaims any obligation or undertaking to
disseminate any updates or revisions to any forward-looking
statement contained herein, to reflect any change in its
expectations with regard thereto, or any other change in events,
conditions or circumstances on which any statement is based.
http://www.newscom.com/cgi-bin/prnh/20050726/CGTREELOGO
http://photoarchive.ap.org/ DATASOURCE: TreeHouse Foods, Inc.
CONTACT: Investor Relations, TreeHouse Foods, Inc., +1-708-483-1300
Ext. 1344 Web site: http://www.treehousefoods.com/
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