Parsippany-based Pinnacle Foods Inc. announced Monday it has entered into a definitive agreement to sell its company to Hillshire Brands for $4.23 billion.
According to the agreement, Hillshire will acquire all shares of Pinnacle. Pinnacle stockholders will receive $18.00 for each share they have, along with Hillshire common stock at a fixed exchange ratio of 0.50 Hillshire shares for each Pinnacle share.
Upon closing of the transaction, which his expected in September 2014, Pinnacle shareholders will own about 33 percent of the combined company.
The combined company is expected to have annual net revenue of approximately $6.6 billion. The new company will be led by current Hillshire President and CEO Sean Connolly.
"This transaction speaks to the value Pinnacle employees have created by executing our strategy of Reinvigorating Iconic Brands. The combination of the brand portfolios of Pinnacle and Hillshire creates a powerful food company with broad reach across frozen, refrigerated and grocery categories," Pinnacle CEO Bob Gamgort said in a prepared statement.
Prakash A. Melwani, Blackstone senior manager director and chief investment officer, private equity, added in a prepared statement, "I want to thank the Pinnacle Foods board of directors, management team and employees for their tireless effort and dedication in transforming Pinnacle into the excellent Company it is today. All Pinnacle shareholders have benefited from the significant value created to date and now have the opportunity to participate in the strength of these combined businesses."
BofA Merrill Lynch and Blackstone Advisory Partners served as financial advisors and Simpson Thacher & Bartlett LLP served as legal counsel, the announcement said.
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