Packaged foods company Pinnacle Foods Inc said it would buy Unilever Plc's Wish-Bone salad dressings business for $580 million to expand its range of branded food products.
Pinnacle, home to labels such as Birds Eye and Duncan Hines, said that it expected a tax benefit of about $125 million because the all-cash deal was structured as an asset purchase.
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Pinnacle, which went public in March, said it would fund the deal with cash on hand and debt.
The portfolio being acquired includes a broad range of liquid and dry-mix salad dressing flavors under the Wish-Bone and Western brand names, Pinnacle said on Monday.
Unilever will continue to manufacture the brands for now under a third-party agreement.
The deal is the latest sale of a well-known food brand by Uniliver, which is focusing on higher-growth food labels such as Knorr and Hellmann's and personal care brands such as Dove, Lux and Rexona. It sold its Skippy peanut butter business to Hormel Foods Corp for $700 million in January.
BofA Merrill Lynch is advising Pinnacle, whose shares closed at $25.46 on the New York Stock Exchange on Friday.