ConAgra Foods Inc.
) announced closure of its Odom's Tennessee Pride acquisition. The
agreement to acquire Odom's Tennessee Pride, the leading producer
of frozen and refrigerated breakfast sandwiches and sausage, was
announced on April 17, 2012.
Odom's Tennessee Pride, which has the annual revenue of above
$190 million and the strength of approx. 750 employees, is the
second largest producer of frozen breakfast sandwiches in the U.S.
As per the initial agreement, the acquisition includes facilities
in Little Rock, Ark., and Dickson, Tenn., and its headquarters
office in Madison, Tenn.
The acquisition is expected to strengthen ConAgra's position in
frozen meals leveraging the company's existing innovation,
marketing and distribution abilities. Moreover, such acquisition
also guarantees expansion of ConAgra's portfolio in the growing
breakfast category of sandwiches and sausage.
ConAgra has been significantly expanding its business portfolio
over time, focusing on branded, value-added opportunities through
the acquisition of a number of private labels. Since last year,
this is the third acquisition for ConAgra Foods after its
acquisition of National Pretzel Company and Del Monte Canada.
This acquisition, backed by the optimism of product line
expansion, is expected to offer stiff competition to many of the
industry players including,
HJ Heinz Co.
Kraft Foods Inc
). Moreover, ConAgra's promotional campaigns, strong sales force,
dedicated customer-serving teams, and category leadership are
anticipated to add depth and dynamism to its new as well as
existing product lines.
We hold a 'Neutral' recommendation on ConAgra over the long
term. However, ConAgra retains a Zacks #3 Rank, implying a
short-term (1-3 months) 'Hold' rating.
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