ConAgra Acquires TaiMei Potato for $93M, Extends Global Footprint - Analyst Blog


Shutterstock photo

Food products company ConAgra Foods, Inc. ( CAG ) recently acquired TaiMei Potato Industry Limited, a potato processor in Shangdu, Inner Mongolia. Valued at $93 million, the acquisition is in line with ConAgra's international expansion strategy.

TaiMei Potato Industry complements ConAgra's Lamb Weston potato business, which produces varieties of sweet potato, frozen potato, appetizer and other vegetable products. The Lamb Weston potato business has been serving more than 100 countries over the past 60 years.

With the acquisition, ConAgra will own its first potato-processing facility in China. TaiMei will aid the company in tapping the growth opportunities in Asia. All 340 employees of the Chinese facility will continue working with the company under the payrolls of ConAgra.

The funds for the transaction will not affect ConAgra's debt reduction plans. The company intends to repay $1 billion debt in fiscal 2015 in order to strengthen its balance sheet.

ConAgra reported disappointing results for the fourth quarter of fiscal 2014, with 8% year over year reduction in adjusted earnings to 55 cents per share. Moreover, quarterly sales declined 2% year over year to $4,436.8 million. However, the Lamb Weston potato business witnessed a rise in sales. In the coming quarters, ConAgra expects to record an improvement in all the business segments, along with synergies from the Ralcorp acquisition.

With a market capitalization of $13 billion, ConAgra holds a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the industry include The Hain Celestial Group, Inc. ( HAIN ), Treehouse Foods, Inc. ( THS ) and Pinnacle Foods Inc. ( PF ). While The Hain Celestial Group and Treehouse Foods sport a Zacks Rank #1 (Strong Buy), Pinnacle Foods holds a Zacks Rank #2 (Buy). 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

HAIN CELESTIAL (HAIN): Free Stock Analysis Report

CONAGRA FOODS (CAG): Free Stock Analysis Report

PINNACLE FOODS (PF): Free Stock Analysis Report

TREEHOUSE FOODS (THS): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
More Headlines for: HAIN , CAG , PF , THS

More from


Equity Research
Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by