Pinnacle Foods to buy Unilever's Wish-Bone salad dressing business
(Reuters) - Packaged foods company Pinnacle Foods Inc (PF.N) said it would buy Unilever Plc's (ULVR.L) Wish-Bone salad dressings business for $580 million to expand its range of branded food products.
Pinnacle, home to labels such as Birds Eye and Duncan Hines, said that it expected a tax benefit of about $125 million because the all-cash deal was structured as an asset purchase.
Pinnacle, which went public in March, said it would fund the deal with cash on hand and debt.
The portfolio being acquired includes a broad range of liquid and dry-mix salad dressing flavors under the Wish-Bone and Western brand names, Pinnacle said on Monday.
Unilever will continue to manufacture the brands for now under a third-party agreement.
The deal is the latest sale of a well-known food brand by Uniliver, which is focusing on higher-growth food labels such as Knorr and Hellmann's and personal care brands such as Dove, Lux and Rexona. It sold its Skippy peanut butter business to Hormel Foods Corp (HRL.N) for $700 million in January.
BofA Merrill Lynch is advising Pinnacle, whose shares closed at $25.46 on the New York Stock Exchange on Friday.