ConAgra Foods is hoping to sell its private-label food subsidiary Ralcorp – which has an estimated value of $3.5 billion – with TreeHouse Foods and Post Holdings, Inc. being likely suitors, Reuters reports.
ConAgra has been pressed into trimming overheads, as the growing prominence of organic food companies continues to eat into its profit margins. Ralcorp's profit margins, since it was acquired by ConAgra for $5.1 billion in 2013, have been relatively tight.
Ralcorp produces private-label foodstuffs such as pasta, cereals, frozen waffles, crackers, fruit preserves, and syrups. It also possesses a bakery division.
That both TreeHouse Foods and Post Holdings are expanding their operations makes them possible buyers for the private-label producer. For example, the former recently bought dairy and egg giant Michael Foods, Inc. for $2.45 billion, and MOM Brands for $1.15 billion, and the latter acquired snack-food firm Flagstone Foods for $860 million.
Centerview Partners and Goldman Sachs are said to be assisting ConAgra in the divestment process.
© 2015 European Supermarket Magazine – your source for the latest retail news. Article by Peter Donnelly.
