Del Monte Foods has reached an agreement to sell its consumer products business to Del Monte Pacific Ltd. (DMPL) for $1.675 billion. Given the distinct operations and markets of Del Monte Foods’ two segments—pet products and consumer products—a sale of the consumer products segment to DMPL will ensure that both business units are best positioned for growth in their respective markets. Upon closing, Del Monte Foods will change its name to reflect its focus on the pet products market.
DMPL owns the Del Monte brand in the Philippines and is the exclusive licensee on the Indian sub-continent for processed products, and is the owner of the S&W brand outside of the Americas for both processed products and fresh produce. The company is publicly traded in Singapore and the Philippines and has been a long-term supplier of processed pineapple to Del Monte Foods.
“Over the last two years, we have made significant investments—operationally, strategically, and organizationally—to build the consumer products and pet products segments into businesses capable of capturing the significant opportunity available to each,” said Dave West, CEO of Del Monte Foods. “We believe DMPL is the right company to build on the consumer products segment’s recent success and achieve its next phase of growth, and we look forward to focusing on expanding our pet products business, which operates in one of the most attractive categories across the U.S. consumer packaged goods industry.”
DMPL is acquiring Del Monte Foods’ portfolio of consumer packaged goods brands, which generate approximately $1.8 billion of annual sales, as well as an established business model and its employees.
The transaction is expected to close in early 2014.