TreeHouse Foods Inc., Oakbrook, IL, plans to acquire Flagstone Foods, a St. Paul, MN-based provider of private-label healthy snacks, one of the fastest-growing, on-trend categories in the food industry. TreeHouse will pay Gryphon Investors, San Francisco, and other shareholders $860 million in cash for the business, subject to an adjustment for working capital.
Following the acquisition, TreeHouse’s pro forma annual sales are expected to approach $3.5 billion and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) should exceed $450 million. The transaction is expected to close during the third quarter of 2014, subject to the satisfaction of customary closing conditions, and is expected to be financed through a combination of borrowings under TreeHouse's existing credit facility and a $325 million equity issuance.