TreeHouse Foods: Now is not the right time to hang 'for sale' sign over entire business
The Illinois-based firm – which operates in 29 product categories across two divisions (meal prep and snacking & beverage) and runs 40 production facilities across North America and Italy - has been cutting SKUs (and jobs) and reengineering its portfolio in recent years, acquiring the majority of Ebro's Riviana Foods US branded pasta business for $242.5m in December 2020, and selling its ready to eat cereals business to Post Holdings for $85m in June 2021.
In November 2021, amid pressure from activist investor hedge fund Jana Partners, the company said it was exploring a sale of some or all of the business.
However, the macro-economic and financing environment "has changed significantly since we began the exploration of a sale of the company," said Ann M. Sardini, Chair of the Board, in a statement this morning, which argued that selling the entire business now would not maximise shareholder value: "We have received clear feedback from multiple constituencies that the long-term prospects for private label and for TreeHouse remain highly compelling, but the business mix is complex.”
Right now, she said, the plan is to focus on the higher growth snacks and beverages business (cookies, crackers, frozen waffles, pita chips, pretzels, bars, powdered drinks, broths, ready-to-drink beverages, coffee and tea concentrates and bagged specialty tea), which generated 37% of its $4.33bn net in sales in 2021.
TreeHouse went on to reaffirm its 2022 guidance, predicting net sales growth of at least 11% year-over-year and EBITDA of $385-415m, with an improvement in its performance weighted toward the second half, with labor shortages and supply chain disruptions continuing to challenge profitability and volume in the first half.
