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ConAgra Wants to Buy More Private Label Processors

December 21, 2011
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ConAgra Foods is on the prowl for more private label processor acquisitions, putting it in the market with its former target, Ralcorp Holdings, which also has said it hopes to make more acquisitions in the private label space during 2012.

“We are clearly ready to jump if the right property comes along with the right kind of attributes,” Gary M. Rodkin, ConAgra’s CEO, told an analysts call Dec. 20 after announcing the Omaha company’s quarterly results.

 

Asked about possible acquisitions in the private label processing part of its business, Rodkin told analysts, “we are clearly ready, willing and able when it makes sense for us. It's got to have the right strategic fit. It's got to have the right kind of metrics that we talked about.”
“The addition of Elan Nutrition bars and, most recently, National Pretzel Company, are examples of expanding our private label footprint,” Rodkin said in his prepared remarks prior to taking analyst questions. “We've talked about how participating in the private label space with the right assets and the right categories can add significant value to customers and open up new doors for growth. We have some very good private label assets in our portfolio already, and we know what good looks like for the private label space. Those insights help us shape our private label expansion plans.”
The purchase of National Pretzel, which closed in the second quarter, brings ConAgra nearly $200 million in annual private label sales that the pretzel maker had done on its own, Rodkin noted. The purchase is expected to add roughly 4 cent a share in 12-month earnings for ConAgra.

ConAgra reported net income of $171.8 million in its latest quarter, down 14.5 percent from $200.9 million in the same period the prior year. Sales reached $3.4 billion in its fiscal second quarter, an 8.1 percent increase from the roughly $3.15 billion realized in the same quarter the prior year.

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