TreeHouse To Buy ConAgra's Private Brands Business For $2.7 Billion

TreeHouse Foods Inc. said Monday it has agreed to acquire ConAgra Foods Inc.'s private brands business for $2.7 billion. TreeHouse said the deal will create the biggest U.S. private label food and drinks maker with annual revenue of nearly $7 billion. The deal is expected to close in the first quarter of 2016, and to shave 20 cents to 35 cents off adjusted per-share earnings in the first year after closing. It's expected to add $1.50 to $1.65 to EPS in year three. TreeHouse will fund the deal with a combination of $1.8 billion in new debt issuance and about $1.0 billion in equity stock issuance. It has also entered new arrangements with its lenders for other borrowing facilities. TreeHouse said it now expects third-quarter EPS of 64 cents to 65 cents and sales of $799 million. Shares were not yet active in premarket trade, but are up 0.1% in the year so far, while the S&P 500 has gained 1%.