Del Monte Foods announced Oct. 10 that it 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, the announcement said. 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.
Del Monte Foods has agreed to sell the Consumer Products business in order to focus its resources and efforts on capturing continued growth opportunities in its Pet Products business, which participates in an expanding $20 billion pet category, through greater emphasis on pet snacks and the pet specialty channel. This agreement comes after a strategic review that determined a sale of the Consumer Products business provided the best opportunities for the growth and stewardship of the company's two differentiated business portfolios.
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 with talented and dedicated employees.
Del Monte Foods' Pet Products brands already have strong market share positions across pet food and pet snack categories.
The transaction is expected to close by early calendar year 2014.
Del Monte Foods is one of the country's largest producers, distributors and marketers of premium quality, branded pet products and food products for the U.S. retail market, generating over $3.8 billion in net sales in fiscal 2013.
The company's pet food and pet snacks brands include Meow Mix, Kibbles 'n Bits, Milk-Bone, 9Lives, Natural Balance, Pup-Peroni, Gravy Train, Nature's Recipe, Canine Carry Outs, Milo's Kitchen and other brand names. The Company also produces and distributes private label pet products and food products.