Del Monte Foods Company announced the completion of its acquisition by Kohlberg Kravis Roberts & Co. L.P. (KKR), Vestar Capital Partners (Vestar) and Centerview Capital, L.P. (Centerview). As per the terms of the agreement, Del Monte’s shareholders will receive $19.00 per share in cash. This represents a 40% premium over the average closing price during the three months. The total value of the transaction is about $5.3 billion. Shareholders approved the transaction on March 7, 2011.
Management Change
Following the completion of the acquisition, Richard G. Wolford, Del Monte’s Chairman of the Board, President and Chief Executive Officer, who successfully led the company since 1997, retired from his post.
In the interim, Neil Harrison, has been named interim CEO, effective immediately. The Sponsors to the acquisition have commenced a search for Mr. Richard’s successor. Harrison, who currently is a Senior Advisor at Vestar, has three decades of experience in the global food industry and in branded consumer products.
Prior to joining Vestar, he was the Chairman and CEO of Birds Eye Foods Inc. Harrison also acted as a former President and CEO of Heinz North America and has held executive positions at Miller Brewing Company (TAP), PepsiCo Inc (PEP), General Foods Corporation and Unilever PLC (UL).
Larry Bodner, Del Monte’s current Executive Vice President, Finance, has been named Executive Vice President and Chief Financial Officer of Del Monte Foods Company, effective immediately. He succeeds David Meyers, who also resigned upon the close of the transaction.
Mr. Bodner joined Del Monte in 2003 and has served in senior finance and investor roles throughout his tenure and is a consumer goods industry finance veteran with more than twenty years of experience in his bag. Before joining Del Monte, Mr. Bodner held senior financial positions at Procter & Gamble (PG) and The Walt Disney Company.
Funding
The acquisition was funded through a combination of new debt financing and a substantial portion of equity contribution by the Sponsors. The debt financing consisted of a new $2.7 billion term loan arranged by J.P. Morgan Securities LLC, Barclays Capital, Morgan Stanley Senior Funding, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated; $1.3 billion of new senior notes for which BofA Merrill Lynch, Morgan Stanley, Barclays Capital and J.P. Morgan were the initial purchasers.
A new $750 million was ABL Facility arranged by Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, Barclays Capital, and Morgan Stanley Senior Funding, Inc.
Del Monte’s common stock ceased trading on the New York Stock Exchange before the opening of the market on March 9, 2011.
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