Reiterates 2024 Guidance
OAK
BROOK, Ill., Dec. 2, 2024
/PRNewswire/ -- TreeHouse Foods, Inc. (NYSE: THS) ("the Company")
today announced that it has signed a definitive agreement to
acquire certain subsidiaries that operate the private brand tea
business of Harris Freeman & Co,
Inc. ("Harris Tea"), a leading
private brand tea manufacturer in the U.S., for approximately
$205 million, subject to customary
purchase price adjustments.
"The acquisition of Harris Tea
strengthens our competitive positioning in the fast-growing tea
category and adds unique blending and sourcing capabilities that
customers desire, building upon TreeHouse Foods' category
leadership, enhancing our position through additional depth and
scale," said Steve Oakland,
Chairman, Chief Executive Officer, and President. "This acquisition
aligns with our long-term strategy to build capabilities in our
higher-growth, higher-margin categories," he added.
The acquisition includes Harris
Tea's manufacturing facilities in Moorestown, NJ and Marietta, GA, and TreeHouse Foods will welcome
approximately 300 Harris Tea team members. The acquisition of
Harris Tea will provide vertical
integration across the Company's existing tea business, and will be
accretive to the Company's overall growth and margins.
"The tea category presents significant opportunity for future
growth," said Kevin Shah, Co-CEO of
Harris Freeman. "It was clear that
TreeHouse Foods would provide a great fit for our next chapter of
growth, given its depth of capabilities, scale, industry expertise,
and customer relationships, and I am confident we will maintain our
upward trajectory as a result of this transaction."
The Company has agreed to a purchase price that equals roughly
8.5x trailing-twelve-month adjusted EBITDA, or 6.5x net of
synergies and the net present value of future tax benefits. This
transaction is expected to close in the first quarter of 2025 and
will be funded primarily with cash on hand, and fully satisfies the
Company's obligation under its bond indenture to either reinvest
certain proceeds from the previously completed Meal Preparation
sale or retire debt. Upon closing, the Company expects its leverage
ratio1 to be within its target range of 3.0x to
3.5x. Finally, TreeHouse Foods is reiterating its 2024 full year
guidance, including the expectation of sequential improvement in
volume growth and profit margin in the fourth quarter.
1 Covenant leverage ratio is defined as total
company net debt outstanding divided by EBITDA including various
adjustments as defined in our credit agreement.
ADDITIONAL INFORMATION
Wells Fargo Securities, LLC served as exclusive financial
advisor and Holland & Knight
served as legal counsel to Harris
Tea on the transaction. Gibson and Dunn served as legal counsel to
TreeHouse Foods, Inc.
ABOUT TREEHOUSE FOODS
TreeHouse Foods, Inc. is a leading private brands snacking and
beverage manufacturer in North
America. Our purpose is to engage and delight - one customer
at a time. Through our customer focus and category experience, we
strive to deliver excellent service and build capabilities and
insights to drive mutually profitable growth for TreeHouse and for
our customers. Our purpose is supported by investment in depth,
capabilities and operational efficiencies which are aimed to
capitalize on the long-term growth prospects in the categories in
which we operate.
Additional information, including TreeHouse Foods' most recent
statements on Forms 10-Q and 10-K, may be found at the Company's
website, http://www.treehousefoods.com.
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking" statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements and other information are
based on our beliefs, as well as assumptions made by us, using
information currently available. The words "believe," "estimate,"
"project," "expect," "anticipate," "plan," "intend," "foresee,"
"should," "would," "could," and similar expressions, as they relate
to us, are intended to identify forward-looking statements. Such
statements reflect our current views with respect to future events
and are subject to certain risks, uncertainties, and assumptions.
Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may
vary materially from those described herein as anticipated,
believed, estimated, expected, or intended. We do not intend to
update these forward-looking statements following the date of this
press release. Such forward-looking statements, because they relate
to future events, are by their very nature subject to many
important factors that could cause actual results to differ
materially from those contemplated by the forward-looking
statements contained in this press release and other public
statements we make. Such factors include, but are not limited to:
risks related to quality issues, disruptions, or inefficiencies in
our supply chain and/or operations; loss or consolidation of key
suppliers; raw material and commodity costs due to inflation; labor
strikes or work stoppages; multiemployer pension plans; labor
shortages and increased competition for labor; success of our
growth, reinvestment, and restructuring programs; our level of
indebtedness and related obligations; disruptions in the financial
markets; interest rates; changes in foreign currency exchange
rates; customer concentration and consolidation; competition; our
ability to execute on our business strategy; our ability to
continue to make acquisitions and execute on divestitures or
effectively manage the growth from acquisitions; impairment of
goodwill or long lived assets; changes and developments affecting
our industry, including customer preferences and the prevalence of
weight loss drugs; the outcome of litigation and regulatory
proceedings to which we and/or our customers may be a party;
product recalls; changes in laws and regulations applicable to us;
shareholder activism; disruptions in or failures of our information
technology systems; geopolitical events; changes in weather
conditions, climate changes, and natural disasters; and other risks
that are set forth in the Risk Factors section, the Legal
Proceedings section, the Management's Discussion and Analysis of
Financial Condition and Results of Operations section, and other
sections of our Annual Report on Form 10-K for the year ended
December 31, 2023, and from time to
time in our filings with the Securities and Exchange Commission
("SEC"). You are cautioned not to unduly rely on such
forward-looking statements, which speak only as of the date made
when evaluating the information presented in this press release.
TreeHouse expressly disclaims any obligation or undertaking to
disseminate any updates or revisions to any forward-looking
statement contained herein, to reflect any change in its
expectations with regard thereto, or any other change in events,
conditions or circumstances on which any statement is based.
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SOURCE TreeHouse Foods, Inc.
