Charoen Pokphand Foods Plc (CPF), the SET-listed flagship of agro-business giant Charoen Pokphand Group, has acquired the entirety of Bellisio Parent LLC, a US frozen food company, for US$1.08 billion.
The transaction, subject to customary conditions and regulatory approvals, is expected to close within 180 days.
Upon completion of the transaction, Bellisio and its subsidiaries (together referred to as Bellisio Group) will become subsidiaries of CPF.
Founded in 1990, Bellisio Group is the third-largest producer and distributor of single-serve frozen entrees in the US, with household brands such as Michelina's, Boston Market, Chili's and Atkins.
To complement existing brands, Bellisio recently introduced the EatingWell and EAT! product lines, focused on balanced food solutions that promote healthy lifestyles. The group has four facilities in Ohio, California and Minnesota. It is also the leader in the single-serve frozen entree market in Canada.
Bellisio Group has deep strategic relationships with leading US retailers with over 50,000 distribution points. Through its central production facility in Jackson, Ohio, Bellisio is able to distribute its products to more than half of the US within 24 hours and nationwide within 48 hours.
For the 12 months that ended in September, Bellisio Group posted adjusted net sales of $668 million and adjusted earnings before interest, tax, depreciation and amortisation of $82 million.
As of Nov 16, Bellisio had capital worth $160 million.
According to CPF's statement to the Stock Exchange of Thailand, the transaction will help CPF enter the world's largest food market.
Bellisio's flagship brand Michelina is one of the most successful brands in the frozen food markets of North America.
CPF can leverage Bellisio Group's nationwide distribution network and relationship with key retailers to distribute CPF's products.
By leveraging the strengths of both Bellisio Group and CPF, multiple opportunities are expected to be realised.
For example, expansion of retail distribution channels using CPF's relationship with key retailers and leveraging CPF's expertise and network in Asia and overseas will help to penetrate the Asian food segment, the statement said.
CPF chief executive Adirek Sripratak said the transaction marks the first step of the company's entry into the world's largest food market, where it sees significant growth and synergy opportunities.
"We believe that through leveraging our combined strengths at CPF and Bellisio Group, we can bring greater variety of products, particularly Asian food products, to US consumers as well as export our products globally," he said.
"This acquisition is in line with CPF's strategic direction to expand into high-potential markets. After the transaction, CPF's revenue contribution from food business will rise."
J.P. Morgan acted as exclusive financial adviser and Davis Polk & Wardwell LLP acted as legal counsel to CPF on the transaction.
CPF reported third-quarter revenue of 123 billion baht, up 10% year-on-year, and a net profit of 5.18 billion baht, up 45%.
The company said revenue during the first nine months of the year reached 345 billion baht, up 11% year-on-year, with net profit rising 36% to 13 billion baht.
Overseas investment and exports from Thailand accounted for 68% of CPF's total sales, while sales in Thailand accounted for 32%.
The solid performance was aided by the recovery of shrimp farming after facing early mortality syndrome.
CPF shares closed yesterday on the SET at 27.75 baht, down one baht, in heavy trade worth 3.2 billion baht.