Pinnacle Foods Inc., Parsippany, N.J., has entered into a definitive agreement for its sale to Hillshire Brands, Chicago, in a transaction to include cash and Hillshire common stock.

Under the terms of the agreement, Hillshire will acquire all outstanding shares of Pinnacle Foods. Pinnacle stockholders will receive $18 in cash for each share held, along with Hillshire common stock at a fixed exchange ratio of 0.50 Hillshire shares for each Pinnacle share. The transaction represents an implied premium of approximately 80% since Pinnacle's March 28, 2013, IPO. Upon the closing of the transaction, Pinnacle shareholders will own approximately 33% of the combined company. Until the time of the closing, Pinnacle will continue to maintain its current quarterly dividend payments.

The transaction is expected to close by September. The combined company will have annual net revenues of approximately $6.6 billion and be led by current Hillshire president and CEO Sean Connolly.

“This transaction speaks to the value Pinnacle employees have created by executing our strategy of reinvigorating iconic brands,” says Pinnacle CEO Bob Gamgort. “The combination of the brand portfolios of Pinnacle and Hillshire creates a powerful food company with broad reach across frozen, refrigerated and grocery categories.”

Pinnacle Foods is known for a variety of branded food products, including Duncan Hines baking mixes and frostings, Duncan Hines Comstock and Wilderness pie and pastry fruit fillings, Aunt Jemima frozen breakfasts, Lender’s frozen and refrigerated bagels and Celeste frozen pizza. Its Specialty Foods Division manages Tim’s Cascade Snacks Hawaiian kettle-style potato chips, Erin’s popcorn and Snyder of Berlin and Husman’s snacks.

Source: Pinnacle Foods Inc., PR Newswire