Though an impact on 2013 earnings is not likely, TreeHouse Foods' (NYSE:THS) $180 million all-cash acquisition of Associated Foods is expected to add between $0.14 and $0.16 to 2014's earnings, TreeHouse announced today. TreeHouse will finance the deal using a portion of its existing $750 million credit facility, the company said.
In addition to next year's expected per-share earnings boost, the deal for Associated Foods will add an estimated $200 million in annual earnings, according to TreeHouse. Associated Brands manufactures and supplies private-label packaged food products to food retailers. It has about 650 employees and is headquartered in Ontario, Canada. It operates three production facilities in Delta, British Columbia, Canada; Medina, N.Y.; and Toronto, Ontario, Canada.
TreeHouse Foods Chairman, President, and CEO Sam Reed commented in a statement that "Associated Brands has a strong North American presence in a number of dry mix categories that are complementary to TreeHouse, such as powdered drinks, oatmeal and side dishes. Through Associated Brands, we will also enter the large and growing specialty tea category."
The deal to buy Associated from TorQuest Partners and other shareholders is expected to close in Q3 of 2013, and is subject to customary closing conditions.
TreeHouse products include non-dairy powdered creamers, private-label canned soups, refrigerated and shelf-stable salad dressings and sauces, powdered drink mixes and single-serve hot beverages, hot cereals, skillet dinners, Mexican sauces, jams and pie fillings, pickles, and liquid non-dairy creamer.