An affiliate of EG Capital Group, a New York-based consumer-focused private equity firm, will also sell its minority stake in Del Monte Canada as part of the transaction. Terms of the transaction were not disclosed.
The agreement with ConAgra Foods includes the sale of all Del Monte-branded packaged fruit and vegetable products and Aylmer tomato products, a manufacturing facility in Dresden, Ontario, and the company’s headquarters offices in Canada.
Del Monte Canada, built from a collection of under performing, non-core food businesses operated by Kraft and previously known as CanGro Foods, was acquired by a Sun Capital affiliate in January 2006. Following the acquisition, Sun Capital launched a new business model to reposition operations more competitively as a sales and marketing business with international production facilities.
Contributing to the successful turnaround of the business, company management focused consistently on driving product innovation, including the introduction of roll-up and frozen fruit snacks and transitioning to plastic packaging instead of using metal cans.
Del Monte Canada also started focusing on higher-margin products, and in 2010 adopted its current name to better reflect the repositioned company. As a result of all efforts, Del Monte’s performance dramatically improved over the past five years, from a money losing business to a highly profitable company today.
Marc Leder, co-CEO at Sun Capital Partners, said: “Del Monte Canada is a classic example of a successful carve-out of a non-core business, and the execution of a focused plan to develop the business to realise its potential. We took an unprofitable business and reinvented it by tapping into the underlying brand value and keeping a focus on innovation and the consumer’s needs. Today, Del Monte Canada is a profitable business well positioned for future growth. ConAgra Foods is an ideal owner for this business given their expertise in the tomato category and their presence in Canada.”
The transaction marks the second time that Sun Capital has sold successfully an affiliate to ConAgra Foods. In April 2010, ConAgra Foods purchased Elan Nutrition, a contract developer and manufacturer of nutritional bars serving the health and wellness, meal replacement, sport nutrition, energy bar and nutraceuticals markets.
Source: Sun Capital Partners
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