TreeHouse Foods (THS) reached a deal with private equity firm Gryphon Investors to buy Flagstone Foods for $860 million, as the company continues to diversify its private-label offerings.
Flagstone is the No. 1 provider of trail mix and dried fruit that retailers sell under their own brands, according to TreeHouse. The St. Paul, Minn.-based company has 1,365 employees and booked sales of $697 million in its most recent fiscal year.
The deal is expected to close in the third quarter. TreeHouse said Monday its pro forma annual sales are expected to approach $3.5 billion with the addition of Flagstone. TreeHouse projects a gain of 24 cents to 28 cents in earnings per share for the first full year after closing.
Shares of TreeHouse jumped 5.1% to $84.00 in pre-market trading.
“Flagstone Foods is ideally situated at the intersection of health and wellness, snacking and the perimeter of the store, and represents an attractive new platform for TreeHouse to enter the on-trend, rapidly growing $7.1 billion healthy snacks category,” TreeHouse chairman and chief executive Sam K. Reed said in a statement.
OakBrook, Ill.-based TreeHouse makes a wide range of private-label products, including pickles, sauces and canned soups. The company has been busy making acquisitions over the last year. In May, TreeHouse completed its purchase of broth and soup maker Protenergy Natural Foods. It also bought Associated Brands, a private-label manufacturer of powdered drinks and sweeteners, in October.