Packaged foods giant ConAgra Foods (NYSE: CAG) looks set to expand its presence outside U.S. borders, as it plans to acquire Del Monte Canada from an affiliate of private equity firm Sun Capital Partners for an undisclosed amount.

The move comes just months after ConAgra's repeated attempts to acquire Ralcorp (NYSE: RAH) failed. Let's go behind the scenes to find out why it is in acquisition mode once again. The interesting subplot here is that Ralcorp recently announced its intention of spinning off its Post cereal brand. This is certainly another story I'll be following closely.

Canadian charm
ConAgra's international business contribution to its top line currently stands at a meager 10%. Last year, the company's "complete frozen meal" category in Canada grew by a remarkable 58% despite the price-competitiveness in this segment. The company is looking to further tap the Canadian market and add to its top line.

Buying out privately owned Del Monte Canada should work out well for ConAgra for a number of reasons. First, Del Monte is an established player with leading market share in the packaged fruits, fruit snack, and vegetable segments. ConAgra will now have access to the lucrative Canadian fruits and vegetables market through all of Del Monte's renowned brands, including Aylmer Tomatoes.

Secondly, the integration of Del Monte's Ontario manufacturing unit with ConAgra's manufacturing operations should create significant cost synergies for the company. Over the past few years, ConAgra has been restructuring its business to focus on its core areas of revenue generation as well as streamlining and optimizing businesses to achieve cost efficiencies.

But is ConAgra up to it?
The company seems well-positioned for the deal with $1.4 billion in annual operating cash flows generated in 2011. Last year, it saved $280 million through improvements made in the consumer foods supply chain, and that cash can come in handy now.

ConAgra has taken the inorganic route to supplement its core growth historically, and acquisitions are not new to the company. Some notable acquired businesses include Alexia, American Pie, Elan Nutrition, National Pretzel Co., and Agro Tech Foods.

Alexia, acquired four years ago, has grown two-and-a-half times its original size while sales of Marie Callender's, a brand under American Pie, registered double-digit growth within just a year of its acquisition. It speaks volumes about ConAgra's ability to integrate acquisitions and turn them into positive earnings.

The company has extensive growth plans this year with $450 million allocated to capital expenditures. I like where ConAgra is going. What about you?

Fool contributor Priya Singh does not own shares of any of the companies mentioned in this article. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.