Del Monte Pacific Limited Completes Purchase of the Consumer Food Business of Del Monte Corporation for US$1.675 Billion
- Acquisition allows Del Monte Foods, Inc. complete focus on the strategic direction of the iconic Del Monte® brand
- Opens access to Del Monte Pacific’s international markets
- Combined global sales of US$2.3 billion create powerful synergies
SAN FRANCISCO--(BUSINESS WIRE)--Del Monte Pacific Limited (DMPL) announced today that it has completed its purchase of the consumer food business from Del Monte Corporation for US$1.675 billion, subject to working capital adjustments. The U.S. consumer food business will be renamed Del Monte Foods, Inc. (DMFI).
“This deal allows for complete focus on the strategic direction of the Del Monte® brand, backed by a visionary and strategic parent in Del Monte Pacific, and positions us to capture significant growth opportunities as Del Monte Foods moves forward.”
“Over the last two years, significant investments have been made into the 100-year-old iconic Del Monte® brand,” said Nils Lommerin, Chief Executive Officer of DMFI. “This deal allows for complete focus on the strategic direction of the Del Monte® brand, backed by a visionary and strategic parent in Del Monte Pacific, and positions us to capture significant growth opportunities as Del Monte Foods moves forward.”
DMPL owns the Del Monte® brand in the Philippines where it is the market leader across major food and beverage categories. The brand also has a growing presence in India through FieldFresh Foods, DMPL’s joint venture with Bharti Enterprises, one of India’s largest conglomerates.
In 2007, DMPL purchased the S&W® brand - a producer and marketer of premium quality packaged fruits and vegetables - from Del Monte Corporation - for Asia, Middle East, Europe and Africa.
DMPL operates one of the largest pineapple plantations in the world. It is proud of its long heritage of 88 years of pineapple growing and processing, which was started by the U.S. company. DMPL brings to DMFI potential benefits from economies of scale, value-added expansion as well as the optimization of its operations over time.
“At present, our market share of the canned pineapple market in the United States is less than ten percent and we will focus on increasing our penetration in this segment by leveraging on the advantages of vertical integration and DMPL’s success in the Philippines and elsewhere,” said Mr. Lommerin.
DMFI’s largely untapped South America business also has the potential to expand in the longer term across new markets and product categories. “At the appropriate time, we will position ourselves to take advantage of the rise of domestic consumption in some of the key South American countries,” commented Mr. Lommerin.
This transaction also opens up access to international markets for DMFI’s products through DMPL’s solid presence in the Philippines, and wide footprint in the rest of Asian markets, while at the same time introducing new products into the U.S. market from Asia. New product categories will also be developed in the U.S.
Mr. Lommerin anticipates that there are considerable opportunities to improve the profitability of DMFI through both sales expansion and cost reduction.
The acquired portfolio of packaged consumer food brands - Del Monte®, S&W®, Contadina® and College Inn® - includes No. 1 position in the branded canned fruits and vegetables market and No. 2 position in the canned tomato and broth categories in the United States. In fiscal year 2013, the portfolio generated US$1.8 billion in sales and US$164 million in EBITDA.
“Del Monte Foods, Inc. is led by an excellent management team with whom we have worked very closely over many years,” said Mr. Rolando Gapud, Chairman of DMPL. “They bring to us a proven track record in managing one of the most respected consumer brands in the United States.”
“We are very excited about this historic transaction which quadruples DMPL’s sales from US$500 million to more than US$2 billion, and fortifies DMPL’s vision of becoming a global branded food and beverage company. This is a game-changer for the Company and we will provide full support to DMFI to ensure we execute against our plans for future growth,” concluded Mr. Gapud.
About Del Monte Foods, Inc.
With more than 100 years of heritage, Del Monte Foods, Inc. is one of U.S.A.’s largest producers, distributors and marketers of premium, high quality branded food products in the U.S. retail market. With a powerful portfolio of brands, Del Monte products are found in eight of every ten U.S. households. Food brands include Del Monte®, S&W®, Contadina®, College Inn® and other brands. DMFI also produces and distributes private-label food products. It operates 11 production facilities and six distribution centers in the U.S., as well as two production facilities in Mexico and one production facility in Venezuela.
Forward Looking Statements
Statements made in this press release are not historical facts – including any statement about Del Monte Foods’ beliefs, plans or projections – and are forward-looking statements based on management’s current plans, estimates and projections as of the date of this press release. Del Monte Foods does not undertake to update any of these statements in light of new information or future events except as they may be required by law. Forward-looking statements involve inherent risks and uncertainties and investors should not place undue reliance on them. There are a number of important factors that could cause actual results to differ materially from those contains in such statements. These factors are described in more detail in our filing with the Securities and Exchange Commission (SEC).