TreeHouse Foods Acquires S.T. Specialty Foods

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September 14, 2010

TreeHouse Foods Inc. signed a definitive agreement to acquire S.T. Specialty Foods for $180 million in cash.

The Brooklyn Park, Minn.-based maker of private label macaroni and cheese, skillet dinners and other side dishes and salads, is a portfolio company of Windjammer Capital Investors that sells primarily to the North American retail grocers and has sales of approximately $100 million.

Sam Reed

"S.T. has had consistent growth since its inception and will not only add to our broad product portfolio for the retail grocery channel, but it will also give us the opportunity to expand our offerings into the lunch and dinner meal occasions," said Sam K. Reed, chairman and CEO of TreeHouse.

Westchester, Ill.-based TreeHouse will pay an additional $15 million in cash if S.T. Specialty Foods achieves certain earnings targets for the 12 month period ending December 31, 2010, according to a company statement.

The acquisition will be financed through borrowings under TreeHouse's existing $600 million credit facility.

"The acquisition will align us with one of the fastest growing food companies in North America," said Dale Schulz, president of S.T. Specialty Foods. "We believe TreeHouse is an excellent fit with not only our products, but also with the culture we have established.”

S.T. Specialty Foods has manufacturing and distribution facilities in Brooklyn Park, Minn. and Kenosha, Wis. TreeHouse executives said they do not anticipate making any significant changes to the company’s existing operations.

Last year TreeHouse acquired Sturm Foods, private label manufacturer of hot cereal and powdered soft-drink mixes, for $600 million. TreeHouse makes pickles, soup and nondairy creamer.

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