Del Monte Foods (NYSE:DLM) celebrated Thanksgiving by inking a $4 billion deal to be taken private by a group led by private-equity giant Kolberg Kravis Roberts.
The deal, which had been speculated about last week, is valued at $5 billion including the assumption of about $1.3 billion in debt. Del Monte Foods makes Meow Mix cat food, Milk-Bone dog biscuits and canned vegetables.
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In addition to KKR, Del Monte Foods will be controlled by private-equity firms Vestar Capital Partners and Centerview.
The $19-a-share price tag represents a 40% premium on the average closing price of Del Monte during the three months before news of a potential deal broke.
“This transaction delivers substantial shareholder value and is a clear endorsement of Del Monte’s strategic success and effective execution,” Del Monte CEO Richard Wolford said in a statement. “This transaction will enable our Company to continue to successfully grow, building on the foundation our team has put into place.”
The agreement also allows Del Monte to solicit alternative proposals from other potential suitors until January 8
Del Monte plans to keep its headquarters in San Francisco and maintain a corporate presence in Pittsburgh.
“Del Monte has a first-rate brand portfolio and excellent reputation for providing high quality and nutritious products to families and their pets,” said Simon Brown, head of KKR’s North American consumer practice.
The Del Monte deal comes on the heels of a number of other leveraged buyouts, including the $2.86 billion takeover by TPG and Leonard Green & Partners of J. Crew (NYSE:JCG).