OAK BROOK, IL
TreeHouse Foods made headlines this week with its purchase of Flagstone Foods for $860 million. The purchase will bring with it Flagstone's popular lines of trail mix and dried fruit, products which TreeHouse stated it considers 'No. 1' in their market.
TreeHouse Chairman and Chief Executive Sam K. Reed spoke excitedly about the recent move: “Flagstone Foods is ideally situated at the intersection of health and wellness, snacking and the perimeter of the store, and represents an attractive new platform … to enter the on-trend, rapidly growing $7.1 billion healthy snacks category.”
TreeHouse Foods expects the acquisition to boost its per-share earnings by 24-28 cents over the next full year, buoyed by annual sales expected to be near $3.5 billion.
"Flagstone Foods has also demonstrated a capability to broaden its product offering with existing customers, to expand into new categories through innovation, and to achieve new customer wins,” Reed said. "Over the last three years, the company has seen top line growth of 24% per annum as well as meaningful margin expansion, and has a clear strategy in place to continue its growth trajectory."
Investors greeted the news with similar excitement, boosting TreeHouse's shares by 1.3% in the immediate aftermath of the deals release, according to the Chicago Tribune.
Flagstone Foods reported sales figures of $697 million in 2013 in its most recent fiscal report.
The transaction is expected to close during the third fiscal quarter of 2014, according to a press release.
