TreeHouse Foods, Inc.
) has announced preliminary sales numbers for the second quarter of
2014, the results of which are scheduled to be released on Aug 7.
The company expects sales to increase 18% year-over-year to
approximately $625 million in the second quarter, in-line with the
TreeHouse expects acquisitions to be the prime driver of sales
and expects these to contribute over 14% of the sales increase in
the upcoming quarter. In addition, the company expects a positive
volume/mix of over 5% for the quarter, offsetting a 1% decline due
to foreign exchange headwinds. The company also anticipates a 6%
increase in volume/mix in the company's North American Retail
Grocery segment, backed by year-over-year increases in beverages,
pickles and salad dressings product categories.
This Illinois-based food manufacturer has been on an acquisition
spree, buying six food companies in the last four years to expand
into new categories and markets.
The most recent acquisition was that of Protenergy Natural Foods
for approximately $150 million (CAD $170 million), which was
completed on May 30. Protenergy Natural Foods is an industry
leading developer and manufacturer of premium quality food and
beverage products. The acquisition added items such as soups,
broths and gravies to TreeHouse's portfolio.
Last month, TreeHouse agreed to acquire Flagstone Foods -- a
Minneapolis-based maker of dried fruits and nuts -- from Gryphon
Investors and other shareholders for $860 million in cash. (Read:
TreeHouse to Acquire Healthy Snack Business
Flagstone for $860M
In relation to that, TreeHouse has recently announced a public
offering of $325 million worth of shares and intends to partly use
the net proceeds to fund the acquisition. The remaining amount will
be financed through borrowings under its existing credit facility.
The deal is expected to close during the third quarter of 2014.
TreeHouse carries a Zacks Rank #1 (Strong Buy).
Other Stocks to Consider
Investors interested in the food industry can also consider
Hain Celestial Group, Inc.
Pinnacle Foods, Inc.
). While Hain Celestial sports a Zacks Rank #1, Pinnacle Foods and
BRF S.A. hold a Zacks Rank #2 (Buy).
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