After extensive discussion and careful deliberation, and with input from independent legal and financial advisors, TreeHouse’s Board of Directors provided an update on the evaluation of strategic alternatives. TreeHouse Foods recently announced its strategy refocus, as the company continues to reshape and build leadership opportunities as well as depth around a focused group of categories in its higher-growth Snacking & Beverages business.
“The demand trends in private label continue to strengthen, and we are well-positioned to build on our momentum in advantaged categories. We remain confident in our strategy and our outlook for the full year,” Steve Oakland, Chief Executive Officer and President, said. “Our commitment to supporting our customers to meet their growing demand, combined with our ongoing plans to implement supply chain enhancements to reduce costs and improve margins, will drive meaningfully improved results and value creation. I want to thank our team of dedicated TreeHouse employees for their commitment to serving our customers and delivering value as we navigate the current environment.”
As noted in the release, TreeHouse will continue its exploration of potential divestiture transactions, including the sale of portions of the Meal Preparation business, either in a single transaction or in a series of transactions, in addition to the company as a whole.
“Throughout the comprehensive strategic review process, we have received clear feedback from multiple constituencies that the long-term prospects for private label and for TreeHouse remain highly compelling, but the business mix is complex,” Ann M. Sardini, Chair of the Board, commented. “That feedback further validates the company’s strategic plan for simplification and growth. In addition, the feedback cited the impact the macroeconomic and financing environment, which has changed significantly since we began the exploration of a sale of the company, has had on the company’s business in the short term. Accordingly, the Board has determined that now is not the right time to pursue a sale of the entire company to maximize shareholder value.”
Sardini continued, noting that, “[...] building on management’s successful transformation work executed since 2018, the Board and the management team are focused on maximizing value in our higher-growth, higher-margin Snacking & Beverages businesses, further streamlining and simplifying the cost structure and divesting portions of our Meal Preparation businesses. We remain open to all alternatives to maximize shareholder value.”
TreeHouse expects that improvement in its performance will be weighted toward the second half of the year, as it expects labor shortages and supply chain disruption will continue to challenge profitability and volume in the first half.
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