Included in the sale are dehydrated products like garlic, onion, and capsicum as well as vegetable products such as Controlled Moisture and Garden Frost.
ConAgra and Olam International agreed a price of $250m for the dehydrated and vegetable product assets, which generated sales of about $300m in the 2010 fiscal year. The transaction itself is expected to close in 30 to 60 days subject regulatory approval.
Focus on the core
Explaining the reasons for the disposal, ConAgra said the move was part of an ongoing strategy to sell non-core operations and improve its focus.
ConAgra CEO Gary Rodkin said: “As our past portfolio changes have demonstrated, transactions like these, along with our capital allocation discipline, have allowed us to concentrate our resources behind the highest opportunity areas of our company.”
Rodkin added that the transaction would give the Gilroy Foods & Flavors operations the “attention and resources for growth”.
Appointments and facilities
Under the terms of the agreement, Olam will take ownership of various manufacturing and warehouse facilities in California, Nevada, New Mexico, and Oregon. But ConAgra will maintain ownership of other facilities producing seasoning blends and flavors in Illinois, New Jersey, and Utah.
Greg Estep, former president of Gilroy Foods & Flavors, is expected to take over at Olam as the head of spices and dehydrates.
Meanwhile, Paul Maas, president of ConAgra Mills, will take on the leadership of the remaining seasoning blends and flavors business at ConAgra under the Spicetec Flavors & Seasonings brand name.