The Blackstone Group will sell Pinnacle Foods to Hillshire Brands for $4.3 billion.
The transaction will bring Pinnacle brands including Mrs. Butterworth's table syrup together with Hillshire products such as Sara Lee desserts and Jimmy Deen breakfast sausages.Blackstone first purchased Pinnacle in 2007 for $2.16 billion. Blackstone paid $1.2 billion for the company while assuming $900 million of debt in 2007.
Hillshire will pay approximately $36.02 per share, amounting to an 18 percent premium over Pinnacle’s closing price on 9 May. Upon closing of the transaction is complete, Pinnacle shareholders will have approximately 33 percent of the company.
Both companies are publicly traded, although this marks a new period in the life of Pinnacle, which has been privately backed for a number of years. Owners have included Hicks Muse, and JP Morgan partners.
For Hillshire, the deal will increase its presence in food manufacturing in frozen foods, the company said.
Blackstone’s private equity arm generated $4.7 billion of realisations during the first quarter of 2014, more than double the $2 billion Blackstone realised during the same period last year, according to the firm’s Q1 earnings call. Blackstone’s total exit activity during the past 12 months generated $12.3 billion, up from $4.6 billion during the previous 12-month period.