TreeHouse Foods

TreeHouse Foods, Incorporated

Type	Public
Traded as	NYSE: THS S&P 400 component
Industry	grocery product manufacturer
Founded	2005
Headquarters	Oak Brook, Illinois, United States
Products	private label grocery products
Revenue	$2.9 billion USD (2014)
Number of employees	7000 (approximate)
Website	http://www.treehousefoods.com

TreeHouse Foods, located in Oak Brook, Illinois, is a multinational food processing company specializing in producing private label packaged foods.^[1][2][3] Created in 2005^[4] and consisting entirely of acquisitions,^[4] in 2010 the company had sales of $2 billion^[4] and employed over 4000 people at 20 facilities.^[4] Food Processing magazine named them their 2010 Processor of the Year,^[4] calling them "the biggest company you never heard of."^[4][5] The company is a component of the S&P 600^[6] and in 2014 was the 46th-largest food and beverage company in North America.^[7]

History

In 2005, Dean Specialty Foods was spun off from Dean Foods as Bay Valley Foods, LLC, a division of TreeHouse Foods, Inc.^[8] In June of that year, TreeHouse Foods started trading on the New York Stock Exchange with a ticker of THS.^[8]

Michelle Obama was a member of the board of directors from 2005 - 2007.^[9] Terdema Ussery, president and CEO of the National Basketball Association’s Dallas Mavericks, serves on the board of directors.^[10]

Acquisitions and subsidiaries

• 2006: Acquired the soup business of Del Monte Foods Company.^[11]
• 2007: Acquired the salsa and picante business of San Antonio Farms, acquired jam, jelly, syrup and pie-filling (both brand name and private-label) producer E.D. Smith, founded by the Canadian politician E.D. Smith^[11]
• 2010: Acquired Sturm Foods and S.T. Specialty Foods^[11]
• 2013: Acquired Naturally Fresh, Inc., Cains Foods,^[12][13] and Associated Brands^[8][14]
• 2014: Made a bid to acquire Michael Foods Group Inc^[15][16]
• 2014: Acquired Flagstone Foods for $860 million.^[17][18][19]
• In April 2014, TreeHouse acquired private-label soup and gravy maker Protenergy Natural Foods from Whitecastle Investments.^[20]
• In June 2014, TreeHouse announced that it was buying Minnesota-based Flagstone Foods for $860 million as a way to gain access to the growing healthy snacks category.^[21] The company said the acquisition would push its annual turnover towards $3.5 billion.^[22]
• In November 2015, TreeHouse agreed to purchase ConAgra Foods' private brand business (known as Ralcorp) for $2.7B.^[23]

Sturm Foods

Sturm Foods is a subsidiary company that manufactures dry groceries under private label brands and distributes them to the foodservice industry and grocery suppliers throughout the world. Sturm Foods' origin was a dairy farm operation begun in 1905 by Arthur Sturm and his four sons. The boys began buying eggs from local farmers and shipping them to relatives in Chicago for sale there. This small business eventually expanded into other commodities during the 1930s, such as sugar, seed, twine, potatoes, flour, coal and gasoline. World War II helped increase the business, at that point known as A. Sturm & Sons. The company began manufacturing for the first time bulk amounts of dried food products, such as eggs and powdered milk, to be delivered to American servicemen on the battle fronts. The company entered the private label distribution market in the early 1970s and continues this business model to the current day. The business flourished throughout the eighties and nineties with a broadening product line and employment increasing from 150 to 500 employees. In May 2005, Sturm Foods was acquired by the LLC and private equity firm HM Capital Partners.

Monday, December 1, 2009 HM Capital announced that Sturm Foods was sold to Treehouse Foods for approximately $660 million. The purchase price is made up of $400m in new debt issuance, $100m in equity stock, with the remainder funded by TreeHouse’s existing revolving credit facility. With this purchase the US soup-to-salad dressings firm has made a move to further expand its dry grocery offerings. For the 12 months leading to September 30, 2009 Sturm generated sales of $340m. Following the acquisition, TreeHouse has estimated that it will have pro-forma sales of around $1.9bn and adjusted EBITDA of over $275m. The company also expects the transaction to be more than 16% accretive on an annualised basis following the acquisition, adding $0.38 to $0.40 in earnings per share.

Business model

The company's primary business strategy is to acquire producers of private-label products in Canada and the U.S.^[24] It services both the retail grocery^[9] and the foodservice distribution channels.^[25][26] In addition to private brand non-dairy creamers, single-serving coffee pods,^[27][28] baby foods, salad dressings, marinades, dips, soups,^[29] sauces, dry mix pasta dinners, jams, spreads, and cereals^[16] the company also maintains several brand name products including McCann's Steel Cut Irish Oatmeal, Cremora^[1] non-dairy coffee lightener, Second Nature egg substitutes, and Nature's Goodness baby foods.^[4]

References

External links

• Official website
• Consumer/Corporate Splash page