Del Monte Foods, the US subsidiary of dual-listed Del Monte Pacific Limited, has acquired Kitchen Basics for US$99 million ($136.7 million).
The assets acquired comprise intellectual property and inventory. No property, plant and/or equipment were acquired.
The consideration was established through an auction process and negotiations between the parties, and financed through available credit facilities.
Kitchen Basics was founded in 1996 and is regarded as the pioneer in liquid stock. Its products are distributed nationally in the US and include a range of conventional and organic stock and broth offerings. The brand remains an industry leader in the US today with net sales of around US$45 million.
According to Del Monte, the acquisition is in line with its overall growth strategy.
On a pro forma basis, had the acquisition been completed on April 30, Del Monte’s net tangible assets (NTA) per share would have increased to 22.71 US cents from 18.65 US cents. The group’s earnings per share (EPS) on a pro forma basis would have increased to 4.39 US cents from 4.17 US cents.
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Kitchen Basics will join Del Monte’s brand portfolio as the company expands its retail presence in the category.
“Del Monte Foods has gone through a positive transformation over the past five years, and we have become a leading innovative CPG growth company,” says Greg Longstreet, president and CEO of Del Monte Foods. “As we plan for the next decade of growth, we’re committed to strengthening our branded product portfolio to meet consumers’ changing needs. The acquisition of Kitchen Basics will enable us to leverage synergies across our business to scale our broth and stock portfolio across North America.”
“We’ve seen heightened interest in broth and stocks over the last few years as consumers double down on home meal preparation, health and wellness,” says Bibie Wu, chief marketing officer of Del Monte Foods. “Kitchen Basics is well-known for its culinary quality. We’re excited to bring Kitchen Basics into the Del Monte family of brands to help people create healthful meals they love.”
Shares in Del Monte closed 0.5 cent higher or 1.43% up at 35.5 cents on Aug 3.
