ConAgra Foods strikes $340m deal to sell Spicetec flavors and seasonings business to Givaudan
Under the deal – which is expected to close in 60-90 days – around 280 Spicetec employees as well as facilities in Cranbury, NJ, and Carol Stream, IL – will transfer to Givaudan, the world’s largest flavors & fragrances company.
Spicetec – which manufacturers flavors, spices and savory seasoning to customers in the food manufacturing, retail, and foodservice industries, primarily in North America, will add approximately $185m to Givaudan’s revenue on a full year basis, said Mauricio Graber, president of Givaudan’s flavor division.
“Combining Givaudan’s leading flavor expertise with Spicetec’s portfolio of products will enable us to deliver a broader range of solutions to our customers in processed meats, savory retail and foodservice.
"Furthermore, these additional capabilities will help us strengthen the breadth of our industry leading natural ingredients, flavor and taste solutions.”
ConAgra CEO Sean Connolly, meanwhile, said he looked forward to having an ongoing relationship with Spicetec as a key supplier to ConAgra Foods.
He added: “We are committed to becoming a more focused and higher performing company in order to drive greater shareholder value. Divesting Spicetec is the latest action we have taken that will allow ConAgra Foods to invest resources into our core product portfolio to drive sustainable growth.”
Sean Connolly: Deal will allow ConAgra Foods to invest in its core product portfolio
ConAgra Foods – which acquired Spicetec in 1988 - has made significant structural changes since bringing on Sean Connolly as its new CEO in April 2015, acquiring natural and organic frozen meal maker Blake’s the following month, and divesting its private label arm Ralcorp to TreeHouse Foods in November.
The firm – which has also unveiled plans to cut about 1,500 jobs and move its HQ from Omaha, Nebraska, to Chicago – is also planning to separate into two independent public companies: one comprising its consumer brands (ConAgra Brands, Inc of which Spicetec was to be a part) and the other its frozen potato foodservice business (Lamb Weston).
"We are committed to becoming a more focused and higher performing company."
Sean Connolly, CEO, ConAgra Foods
Conagra Brands (led by CEO Sean Connolly and based in Chicago): This new segment will include the consumer foods operation (which generated revenues of c.$7.2bn in fiscal 2015) and features brands such as Marie Callender’s, Hunt’s, RO*TEL, Reddi-Wip, Slim Jim, PAM, Chef Boyardee, Orville Redenbacher’s, P.F. Chang’s and Healthy Choice.
It will also include the traditional foodservice business (sales of branded products to foodservice companies), Spicetec and JM Swank, as well as certain private label operations, which collectively generate c.$1.8bn in revenues. Conagra Brands is also expected to retain ConAgra Foods’ stake in the Ardent Mills flour milling joint venture.
Lamb Weston: This portfolio will consist of frozen potato, sweet potato, appetizer and other vegetable products, as well as a continued presence in retail frozen products under licensed brands and private brands. For fiscal 2015, Lamb Weston generated revenues of c. $2.9bn.