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TreeHouse to sell $400 million in high-yield debt, draw on revolver for Sturm purchase
By Sara Rosenberg
New York, Dec. 21 - TreeHouse Foods Inc. plans to issue about $400 million of new debt in the high-yield market and use borrowings under its existing revolving credit facility to help fund the acquisition of Sturm Foods, company officials said in a conference call on Monday.
Other funds for the acquisition will come from a $100 million stock offering.
TreeHouse is purchasing Sturm from HM Capital Partners LLC for $660 million.
BofA Merrill Lynch is acting as financial advisor to TreeHouse on the transaction and Deutsche Bank is financial advisor to Sturm and HM Capital.
Both the financing and the acquisition are expected to close in the first quarter of 2010.
Following the acquisition, TreeHouse will have pro forma sales of about $1.9 billion and adjusted EBITDA of over $275 million.
TreeHouse is a Westchester, Ill.-based food manufacturer servicing primarily the retail grocery and foodservice channels. Sturm is a Manawa, Wis.-based private label manufacturer of hot cereal and powdered soft drink mixes.
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