Food manufacturer TreeHouse Foods (THS) announced Monday that it will buy Manawa, Wisc.-based Sturm Foods, which manufactures hot cereals, organic and natural foods, for $660 million.
The company expects the deal to close by Mar. 31, 2010, and expects the acquisition to add $340 million in annual revenue.
"Sturm Foods is a significant addition to TreeHouse, both strategically and financially," said Sam K. Reed, Chairman and Chief Executive Officer for TreeHouse, in a statement. "Sturm will give us the leadership position within the private label hot cereal and powdered soft drink mix categories. Both categories are large and growing, offer health and convenience benefits, and have significant private label shares of 26% and 20%, respectively."
The company also boosted its 2009 earnings forecast, estimating adjusted earnings to range between $2.10 and $2.12 a share, compared to a previous view of $2.07 to $2.09 a share.
TreeHouse raised its 2010 adjusted earnings per share view to reflect the acquisition; it now expects adjusted 2010 earnings to range between $2.32 and $2.37 a share.
Shares of TreeHouse Foods rose $4.14 or 12.34% in Monday’s session, closing at $37.70 a share.
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