OAKBROOK, ILL. — TreeHouse Foods is set to acquire Flagstone Foods, St. Paul, Minn., for $860 million in cash. Flagstone is a manufacturer of private label snacks, including snack nuts, trail mixes and dried fruit.
Flagstone reported sales of $697 million during 2013 and has two manufacturing plants, one in Minneapolis and the other in Roberson, N.C. The company employs approximately 1,365.
“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 billon healthy snacks category,” said Sam K. Reed, chairman, president and chief executive officer. “Flagstone Foods has also demonstrated a capability to broaden its product offering with existing customers, to expand into new categories through innovation, and to achieve new customer wins. Over the last three years, the company has seen top-line growth of 24% per annum as well as meaningful margin expansion, and has a clear strategy in place to continue its growth trajectory.”
The transaction is expected to close during the third quarter of 2014, have a 5c to 8c impact on 2014 earnings and add approximately 24c to 28c in earnings per share in the first full year following closing, according to TreeHouse Foods.
Paul Lapadat, the c.e.o. of Flagstone Foods, and his management team will remain once the acquisition is complete Mr. Reed said.“I’m very proud of what we have built to date at Flagstone Foods, and I believe that we are just getting started,” Mr. Lapadat said. “By joining TreeHouse Foods, I am confident that we will continue our strong track record of growth. Our management team is among the best, comprised of food industry veterans, and we remain highly focused on delivering innovative and on-trend healthy snacks by both adding new customers and growing and expanding our existing retail partnerships.”