Kramer Levin, Simpson Advise on Del Monte Sale
Del Monte Foods is giving up fruits and vegetables but keeping its Kibbles 'n Bits.
The company said Thursday that it has agreed to sell its well-known canned fruits and vegetables business to Del Monte Pacific Limited—a separate company that sells products under the Del Monte brand in the Philippines—in a deal worth $1.68 billion. The unit includes canned fruits, vegetables, and broths marketed under the Del Monte, College Inn, Contadina, and S&W brands. The deal is expected to close by the end of the year, pending regulatory approval.
Del Monte Pacific, which also sells fresh and packaged produce in China and India, operates the world's largest pineapple plantation through a Philippines-based subsidiary and holds long-term supply agreements with Del Monte Foods.
In announcing the deal, San Francisco–based Del Monte Foods said that selling the consumer products unit will allow it to further expand its presence in the $20 billion U.S. pet food market. Upon closing of the deal, Del Monte Foods said it plans to change its name to reflect its focus on a stable of pet food brands that includes Kibbles 'n Bits dog food, Meow Mix and 9Lives cat food, and dog snacks like Milk-Bone and Snausages.
When private equity firm KKR bought Del Monte Foods for $5.3 billion three years ago, the company noted its past efforts to expand the pet food unit, and said it planned to give that market even more attention in the future. In May, the company paid an undisclosed amount to acquire Natural Balance Pet Foods, the pet food maker cofounded in 1989 by Spaceballs actor Dick Van Patten.
Kramer Levin Naftalis & Frankel is advising Del Monte Pacific on the deal with a team led by real estate partner Jay Neveloff, corporate partner Peter Smith, and banking partner David Fisher in New York, along with associates Sarah Kaehler and Seth Merl. Antonio Ungson is Del Monte Pacific's top in-house attorney.
Del Monte Foods, meanwhile is being represented in the sale by a group of attorneys from Simpson Thacher & Bartlett led by New York–based corporate partner Marni Lerner. The firm represented Del Monte Foods on the acquisition of Natural Balance earlier this year, and advised longtime client KKR when it acquired the company in 2010. Bruce Jordan serves as general counsel of Del Monte Foods.