TreeHouse Agrees to Acquire Sturm Foods

December 22, 2009

TreeHouse Foods Inc. has agreed to pay $600 million to buy Sturm Foods, a private label manufacturer of hot cereal and powdered soft-drink mixes for retailers.

Completion of the Sturm acquisition will make TreeHouse the leader in the private-label hot cereal and powdered soft-drink mix categories, giving it market share of 26 percent and 20 percent, respectively, CEO Sam Reed said in a statement.

Shares of TreeHouse, which produces pickles, soup and nondairy creamer, rose dramatically on the news. The deal is expected to close by March 31 and will increase annual revenue by more than $340 million, according to a Bloomberg report.

Several months ago, executives for the Westchester, Ill.-based company announced plans to expand into private label through acquisition.

At the time, Reed, a former Keebler executive, identified a dozen private-label acquisition targets that would enable the company to develop premium store brands and enter new food categories.

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Keywords: business, companies, food and beverage, industry, markets, private label acquisitions, private label beverages, private label food, sam reed, store brand acquisitions, store brand beverages, store brand food, sturm foods, treehouse

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