Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Del Monte Foods in $4 billion buyout

By Ben Rooney, staff reporter


NEW YORK (CNNMoney.com) -- Del Monte Foods, the consumer and pet food company, agreed to be bought by an investor group for $4 billion, the company announced Friday.

Kohlberg Kravis Roberts & Co., Vestar Capital Partners and Centerview Partners will pay a premium price of $19 per share for the San Francisco-based company. The deal, which includes $1.3 billion in Del Monte's net debt, is valued at about $5.3 billion.

Del Monte (DLM) shares rose 4% to $18.75 on Friday after closing at $17.99 on Wednesday. U.S. financial markets were closed Thursday for the Thanksgiving holiday.

Under the terms of the deal, Del Monte is allowed to solicit alternative proposals through Jan. 8, 2011. The company said it will "actively" seek other suitors, but if no "superior offer" is found the deal announced Friday is expected to close by the end of March.

"This transaction will enable our Company to continue to successfully grow, building on the foundation our team has put into place," Richard Wolford, chief executive of Del Monte Foods, said in a statement.

Del Monte, which had sales of $3.7 billion in fiscal 2010, produces and distributes food under its own name and others, including S&W, Contadina and College Inn. It also has a large portfolio of pet foods such as Meow Mix, Kibbles 'n Bits and Milk-Bone.

Simon Brown, a member of KKR's consumer group, said in a statement that the firm looks forward to continuing Del Monte's "proven strategy for growth."

"Del Monte has a first-rate brand portfolio and excellent reputation for providing high quality and nutritious products to families and their pets," he said. To top of page

Index Last Change % Change
Dow 16,643.01 -11.76 -0.07%
Nasdaq 4,828.33 15.62 0.32%
S&P 500 1,988.87 1.21 0.06%
Treasuries 2.19 0.02 0.83%
Data as of 11:15am ET
Company Price Change % Change
Freeport-McMoRan Inc... 10.50 0.31 3.04%
Bank of America Corp... 16.36 -0.08 -0.49%
Apple Inc 113.29 0.37 0.33%
Intel Corp 28.42 0.70 2.53%
Alcoa Inc 9.41 0.55 6.21%
Data as of Aug 28
Sponsors

Sections

Efforts to unionize low-wage employees of fast-food franchisees and outside contractors get lift from decision of NLRB. More

China's Vice Finance Minister Zhu Guangyao said if there is "systemic risk to the financial system, we must take action." More

The market volatility in China and the U.S. could hit private companies, especially late-stage unicorns. More

How do you run a successful crowdfunding campaign? Indiegogo's CEO Slava Rubin offers his top tips and mistakes to avoid. More

Looking for something good on Netflix? These entertaining films will help you learn more about finance and investing. More