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WESTCHESTER, Ill. -- TreeHouse Foods, Inc. here has completed its purchase of the private label soup and infant-feeding businesses of Del Monte Foods Co. As announced on March 2, TreeHouse agreed to pay $268 million in cash for the businesses, plus an adjustment for working capital.
The soup business manufactures and distributes condensed soup, ready-to-serve soup, broth, and gravy, primarily to supermarkets and mass merchandisers for sale under the retailer's own label. The business has an estimated 70 percent volume share of private label soup, which in turn has about a 10 percent penetration of the wet soup category.
"The purchase of the private label soup and infant-feeding business is a great fit for our go-to-market strategy," said Sam K. Reed, TreeHouse's chairman and c.e.o. "We see opportunities to create operational efficiencies and to deliver top-line growth due to our focus on private label foods."
Soup and infant-feeding products are manufactured at facilities in Pittsburgh and Mendota, Ill. TreeHouse has acquired the Pittsburgh facility and distribution center and entered into a long-term lease agreement at Del Monte's Mendota manufacturing facility. The businesses' headquarters will remain in Pittsburgh. Further, TreeHouse doesn't anticipate any significant changes to the existing operations.