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Issue Date: Vol. 50, No. 12, December 2010, Posted On: 11/29/2010

Investor Group Pacts To Acquire Del Monte Foods Co. For $4B

by Staff Reporter
Del Monte Foods Co., Richard Wolford, Kohlberg Kravis Roberts & Co., Vestar Capital Partners, Centerview Partners, vending, vending machine food, vending machine business

SAN FRANCISCO -- Del Monte Foods Co. has agreed to an acquisition offer from a group of investors. The prospective purchasers are led by Kohlberg Kravis Roberts & Co. , Vestar Capital Partners and Centerview Partners.

Under terms of the accord, the purchasers will pay $19 a share for Del Monte, and will assume $1.3 billion in debt. The agreed-upon price represents a 6% premium over the stock's closing price on Nov. 24, the day the agreement was made. Del Monte is at liberty to solicit other offers through Jan. 8, 2011.

According to Del Monte chief executive Richard Wolford, the pact "delivers substantial shareholder value, and is a clear endorsement of Del Monte's strategic success and effective execution."

Del Monte's profit rose nearly 42% during the fiscal year ended in May 2010; revenue rose 3% in the period to $3.74 billion. The company subsequently reported that first-quarter revenue for the new fiscal year fell off as its consumer business softened. Thus, the company has reduced its projection for revenue growth this year.

Over the past decade, the company has grown through acquisitions, and presently generates more than 50% of its revenue from its pet food business. Del Monte began trading publicly in 1999.

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