REFILE-UPDATE 1-TreeHouse Foods to buy Flagstone Foods for $860 mln
(Corrects to "Gryphon Investors" from "Gryphon Investor" in paragraph 9)
June 30 (Reuters) - Pickle maker TreeHouse Foods Inc said it will buy Flagstone Foods, a maker of private-label health snacks, for $860 million from Gryphon Investors.
TreeHouse shares rose 5 percent in premarket trading.
Flagstone is the top producer of trail mix and dried fruit that North American retailers brand and sell as their own, TreeHouse said.
"Flagstone Foods is ideally situated at the intersection of health and wellness, snacking and the perimeter of the store, and represents an attractive new platform ... to enter the on-trend, rapidly growing $7.1 billon healthy snacks category," TreeHouse Chief Executive Sam Reed said.
ConAgra Foods Inc, which became the largest U.S. private-label food maker since acquiring Ralcorp Holdings for $5 billion in January last year, has struggled with weak sales as consumers opt for healthier meals and cook more.
TreeHouse said it will finance the deal through its existing credit facility and by issuing equity worth $325 million.
The purchase will add about $750 million in annual sales and 24-28 cents per share to the company's earnings in the first year after the deal is closed, - likely in the third quarter - TreeHouse said.
Reuters reported on Thursday that TreeHouse was in late-stage talks to buy Flagstone.
Flagstone, which has about 1,365 employees, was formed when Gryphon Investors bought and combined Amport Foods and Ann's House of Nuts in 2010.
TreeHouse, which says it is the largest manufacturer of pickles and non-dairy powdered creamer in the United States, also makes soups, salad dressings, sauces and cereals.
It supplies food products to supermarkets for resale under the retailers' own labels, as well as to foodservice distributors and restaurant chains. (Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Joyjeet Das)