Del Monte Foods is finally shedding its long-held canned fruits and vegetables business.
The company said late on Thursday that it was selling its consumer products division to Del Monte Pacific, the Asian company that already sells food under the Del Monte brand in the Philippines and India, for $1.68 billion.
The deal will let Del Monte Foods focus on what is now its biggest business, pet foods. By the time the company sold itself to a group led by Kohlberg Kravis Roberts three years ago, it drew about half of its $3.7 billion in revenue from sales of brands like Meow Mix and Kibbles ‘n Bits.
It will also give Del Monte Pacific an entryway into the United States, a market where consumer spending has been rising.
“We believe DMPL is the right company to build on the Consumer Products segment’s recent success and achieve its next phase of growth, and we look forward to focusing on expanding our pet products business, which operates in one of the most attractive categories across the U.S. consumer packaged goods industry,†Dave West, the chief executive of Del Monte Foods, said in a statement.
The transaction is a further shuffling of the Del Monte food brand, which was created in the late 1800s, among various unaffiliated companies. Fresh Del Monte Produce, for instance, sells fresh bananas and pineapples.
Del Monte Foods said that it planned to rename itself to reflect its focus on pet foods.
Del Monte Pacific was advised by Perella Weinberg Partners, Citigroup and the law firm Kramer Levin Naftalis & Frankel.
Financing for the deal is being provided by Citi, Morgan Stanley and the Philippine banks BDO Capital and Bank of the Philippine Islands.
Del Monte Foods was advised by Morgan Stanley, Centerview Partners and the law firm Simpson Thacher & Bartlett.
