TreeHouse Foods

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TreeHouse Foods, Incorporated
Public
Traded as NYSETHS
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[edit]

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[edit]

  • 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[edit]

Sturm Foods, Incorporated
Public
Industry Dry grocery product manufacturer
Founded 1905
Headquarters Manawa, Wisconsin, United States
Products Seasonings, Puddings, Gelatins, Powdered drink mixes, Single-serve "K-cups," Dried oatmeal, Organic products, Liquid beverage enhancers
Revenue $77.4 million USD (2006)
Number of employees
1,000 (approximate)
Website External link

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[edit]

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[edit]

  1. ^ a b "Behind the Brand: TreeHouse Foods". Seattle Times. Retrieved 31 March 2014. 
  2. ^ Hargrave, Marshall. "There Is Money To Be Made In Store Brand Foods". Motley Fool. Retrieved 31 March 2014. 
  3. ^ Watson, Elaine. "TreeHouse Foods cashes in as consumers opt for premium private label single-serve coffee, tea". Food Navigator. Retrieved 31 March 2014. 
  4. ^ a b c d e f g Fusaro, Dave. "2010 Processor of the Year: Treehouse Foods". Food Processing. Retrieved 31 March 2014. 
  5. ^ Thain, Greg (2012). Store Wars: The Worldwide Battle for Mindspace and Shelfspace. Wiley. ISBN 978-1-118-37406-1. 
  6. ^ "TreeHouse Foods, Inc. Company Profile". Hoovers. Retrieved 31 March 2014. 
  7. ^ "Food Processing's Top 100". Food Processing. Retrieved 31 March 2014. 
  8. ^ a b c "History". TreeHouse Foods. Retrieved 31 March 2014. 
  9. ^ a b Parker, Jennifer. "Michelle Obama Cuts Ties with Controversial Wal-Mart Supplier". ABC News. Retrieved 31 March 2014. 
  10. ^ "Board of Directors". TreeHouse Foods, Inc. Retrieved 7 April 2014. 
  11. ^ a b c "TreeHouse Foods History". Retrieved 11 May 2014. 
  12. ^ Waterhouse, Gail. "Cains Foods sold for $35 Million to TreeHouse Foods". The Boston Globe. Retrieved 31 March 2014. 
  13. ^ "TreeHouse Foods, Inc Completes Acquisition of Cains Foods L.P.". Reuters. Retrieved 31 March 2014. 
  14. ^ "TreeHouse Foods to buy Associated Brands". Chicago Business Journal. Retrieved 31 March 2014. 
  15. ^ "TreeHouse Foods (THS)/Michael Foods Deal Has Limited Potential". StreetInsider.com. Retrieved 31 March 2014. 
  16. ^ a b Oran, Olivia. "TreeHouse Foods joins list of Michael Foods Suitors". Reuters. Retrieved 31 March 2014. 
  17. ^ Wang, Selina. "TreeHouse Foods to Buy Flagstone for $860 Million". Bloomberg.com. Retrieved 2016-03-08. 
  18. ^ Inc., TreeHouse Foods,. "TreeHouse Foods to Acquire Flagstone Foods for $860 million". www.prnewswire.com. Retrieved 2016-03-08. 
  19. ^ Xu, Jodi. "TreeHouse Foods Said to Weigh Acquisition of Flagstone Foods". Business Week. Retrieved 14 May 2014. 
  20. ^ Calia, Michael. "TreeHouse Foods to Buy Protenergy Natural Foods". Wall Street Journal. Retrieved 11 May 2014. 
  21. ^ "TreeHouse Foods Buying Flagstone Foods for $860M". ABC NEWS. Retrieved 30 June 2014. 
  22. ^ "TreeHouse Foods acquiring health snack maker Flagstone Foods for $860 mn". Minneapolis News.Net. Retrieved 2 July 2014. 
  23. ^ http://finance.yahoo.com/news/conagra-sell-private-brands-business-123731091.html
  24. ^ Gelski, Jeff. "TreeHouse on the lookout for acquisitions". Food Business News. Retrieved 11 May 2014. 
  25. ^ "TreeHouse Foods Profile". Forbes. Retrieved 31 March 2014. 
  26. ^ "TreeHouse Foods, Inc.". New York Times. Retrieved 31 March 2014. 
  27. ^ Solon, Olivia. "Trouble brewing as company adds 'DRM' to coffee". Wired.co.uk. Retrieved 31 March 2014. 
  28. ^ "TreeHouse Sues Green Mountain Coffee for Anti-Competitive Product". Reuters. Retrieved 31 March 2014. 
  29. ^ Lindeman, Teresa. "Sales rise and profit falls at TreeHouse Foods". Pittsburgh Post-Gazette. Retrieved 31 March 2014. 

External links[edit]