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TreeHouse Foods, Inc. announced Friday it has entered into an agreement with TorQuest Partners LLC and other shareholders to acquire Associated Brands GP Corporation (Associated Brands), a leading private label manufacturer of powdered drinks, specialty teas and sweeteners.
TreeHouse has agreed to pay CAD $187 million (approximately US $180 million) in cash for the business, subject to an adjustment for working capital.
The acquisition of Associated Brands will strengthen TreeHouse's retail presence in private label dry grocery and will introduce a line of specialty tea products to complement its fast growing single serve coffee business.
"We are pleased to welcome Associated Brands to our TreeHouse portfolio," said
Associated Brands had sales of approximately $200 million for the twelve months ended June 30, 2013. Following the acquisition, TreeHouse will have pro forma 2013 sales of approximately $2.5 billion and adjusted EBITDA of approximately $350 million. The Company expects the transaction to have a neutral effect on 2013 earnings and add approximately $0.14 to $0.16 in EPS in 2014. The transaction is expected to close in the third quarter of 2013.
"We are looking forward to joining the TreeHouse family," said Scott Greenwood, president and CEO of Associated Brands. "Like us, TreeHouse is focused on partnering with its customers to develop superior products. We are focused on quality and operational expertise, we have an excellent R&D platform which allows us to be a fast follower in private label, and we are a best in class specialty tea producer with capabilities that are unmatched in the industry. We are confident that the combination will create distribution and innovation opportunities for both companies."