Dallas, Texas 05/15/2014 (FINANCIALSTRENDS) –Hillshire Brands Co (NYSE:HSH) said that it would acquire Pinnacle Foods Inc in the $4.3B deal that will now combine the company’s line-up of the Jimmy Dean sausages & the Hillshire lunch meats with HSH’s Birds Eye frozen-vegetables & Vlasic pickles. Analysts are saying that this particular deal dashes investor hopes that the company will be acquired by a much larger company. This deal, which is the company’s 3rd in the year, will make it the owner of 10 different complementary brands that are either #1 or # 2 in their specific categories, and will bolster its presence in the frozen and refrigerated and the packaged food aisles in U.S. supermarkets.
Both Hillshire & Pinnacle focus on various convenient products that appeal to very similar consumers, said Sean Connolly, Chief Executive Officer of Hillshire Brands Co (NYSE:HSH) who will be leading the post-merger company. All these brands are almost like siblings to the. Meats go very well with vegetables, and sandwiches go with pickles said Connolly in an interview. This deal also will expand the company’s cost-base much beyond the pricy beef & pork and it will create various co-branding opportunities, said he. For example, the Birds Eye’s Voila skillet-meals contain some unbranded meats that could also be replaced with the HSH products.
The company’s other products include the Aidells sausages & Gallo Salame. Pinnacle sells Open Pit barbecue-sauces, Mrs. Paul’s frozen sea- food & Wish-Bone salad dressing. Hillshire, was previously in the food business of the Sara Lee Corp, and is offering $18 as cash & half of 1 of its shares for every Pinnacle share. The offer now values Pinnacle at $36.48/ share, which is a premium of around 20% to Pinnacle’s closing-price on Friday. With the inclusion of debt, this deal is valued at $6.6B. Hillshire Brands Co (NYSE:HSH) said it that had secured some committed financing from Goldman Sachs and Co.