* Deal to close in next several months
* Business to double Heinz's LatAm sales in 1st full year
* Deal modestly dilutes earnings in '12, adds in '13
* Shares up 1.6 percent in premarket trading
(Adds deal value, sales, analysts' estimates, share activity,
analyst comment; changes dateline, previous DETROIT)
NEW YORK, March 3 H.J. Heinz Co HNZ.N plans
to buy an 80 percent stake in a Brazilian food company for an
undisclosed amount, establishing its first major business in
Latin America's biggest country.
Heinz plans to buy the stake in Coniexpress S.A. Industrias
Alimenticias, maker of the Quero brand of tomato-based sauces,
tomato paste, ketchup, condiments and vegetables.
Officials at the unlisted Brazilian company, which has
annual sales of about $325 million, were not immediately
available to comment.
Heinz said on Thursday it expects to close on its purchase
in the next several months. The company declined to provide any
financial details, but Brazilian newspaper Valor Economico said
the deal was worth 1.2 billion reais ($720 million), citing
Heinz shares rose 1.6 percent in premarket trading.
The deal will roughly double Heinz's sales in Latin America
in the first full year, Heinz Chief Executive William Johnson
said in a statement, pointing to the country's 200 million
"Brazil has been on our priority list for some time because
it generates about 45 percent of Latin America's gross domestic
product and is one of the fastest growing economies in the
world," he added.
Heinz expects the Quero deal to modestly hurt earnings in
fiscal 2012, but add to earnings in 2013.
Stifel Nicolaus analyst Christopher Growe affirmed his
"buy" rating on Heinz shares, saying the company's growth in
sales and earnings continues to foster upside for the shares
from this level.
EMERGING MARKET BOOST
Valor Economic said under the deal's terms, about 200
million reais out of the 1.2 billion will be set aside for five
years to pay labor and tax liabilities that could come up. The
paper added that after five years, whatever remains from the
200 million reais would be transferred to Quero's current
owners while the remaining 20 percent share in the company
would go to Heinz.
The company expects emerging markets to generate more than
20 percent of its total sales in fiscal 2012, which begins on
Heinz said the Quero brand holds the No. 1 or No. 2
positions in numerous tomato-based categories in Brazil and the
leading position in vegetables. Heinz expects to expand the
business, which employs almost 1,800 people, into larger
supermarkets and commercial outlets.
Heinz also posted earnings of 84 cents a share for its
fiscal third quarter. Analysts on average had been expecting 82
cents per share, according to Thomson Reuters I/B/E/S, even
though Heinz said last week that it expected its profit to be
84 cents. Before that, analysts expected 80 cents.
In the quarter ended Jan. 26, sales rose to $2.72 billion,
topping analysts' average estimate of $2.71 billion.
Johnson also said last week that there were a lot of
acquisition opportunities in emerging markets and that the
biggest problem was prioritizing them. [ID:nN24229436]
Heinz shares rose to $49.75 in premarket trade from their
close of $48.98 on Wednesday on the New York Stock Exchange.
(Reporting by Ben Klayman in Detroit, Martinne Geller in New
York and Inae Riveras in ; Editing by Derek Caney, Dave