ConAgra Bags Private Label Pretzel Company

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November 15, 2011

It may not be Ralcorp, but ConAgra has finally added a business to its private label portfolio – buying National Pretzel Co.

Lancaster, Pa.-based National Pretzel makes private label pretzels in a variety of forms, including rods, sticks, braids and twists for a variety of customers, including many grocery retailers. Financial terms of the transaction were not disclosed, but the deal is expected to close within 30 days.

The purchase comes on the heels of ConAgra’s failed bid to acquire Ralcorp, making several bids for the company since March. All offers were rejected including a $94 per share offer in August. Management said the $5.2 billion offer was insufficient and the board of directors adopted a shareholder rights plan -- or poison pill -- in May to effectively block a hostile takeover.

ConAgra hoped to add Ralcorp’s brands to help build a private label portfolio. Ultimately ConAgra walked away from the deal, refusing to increase its offer.

“Acquiring National Pretzel Co. is consistent with our strategies for growth, which include expanding our private label footprint and growing in strategic adjacencies,” said Gary Rodkin, CEO of ConAgra Foods. “National Pretzel is a leading private label manufacturer with a strong team in an attractive category. We are confident we can profitably leverage our innovation and supply chain capabilities as we integrate our businesses after close of the transaction.”

National Pretzel has posted net sales growth of 7 percent annually over the last three years, with total net sales approaching $200 million. The company has a leading position in the supply of private label pretzel items, and also posts sales under the HK Anderson and Shultz labels, both of which were included in the agreement, in addition to three bakeries located in Lancaster, Pa., Hanover, Pa. and Visalia, Calif.

Last year, ConAgra Foods acquired Elan Nutrition, a privately held manufacturer of snack and nutrition bars, which will be integrated into the company’s store brands business.

Elan Nutrition “will allow ConAgra Foods to grow its private label bar business through new product development capabilities and manufacturing capacity,” the company said in a statement. “We are confident in the growth potential of this important category and expect a smooth integration of Elan Nutrition's business and capabilities into our Snacks platform," Rodkin said at the time.

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