Gryphon Investors has booked a 4x return on the sale of Flagstone Foods, a Minnesota based provider of branded and private-label healthy snacks.
TreeHouse Foods will by the company for $860 million. TreeHouse has agreed to as much as an additional $30 million in potential earn out if the company meets specific performance indicators, according to a source familiar with the matter.
Gryphon declined to comment on the transaction.
Gryphon created Flagstone Foods in 2010 by merging two acquisitions – Ann’s House of Nuts, and American Importing Company (Amport Foods). The companies were previously the largest private-label manufacturers of trail mix, snack nuts, and dried fruits. Together they created the largest healthy snacks manufacturer in the US.
TreeHouse Foods Inc. makes non-dairy powdered creamers and sweeteners, specialty teas, cereals, macaroni and cheese and other items.
The deal will generate a 50 percent IRR for Gryphon and is expected to close in the third quarter of this year subject to regulatory approvals.
TreeHouse shares were up slightly following the news. The company expects the transaction to lower 2014 earnings to 5 cents from 8 centers per share.