Milling & Baking News - December 29, 2009 - 8



TreeHouse Foods to acquire hot
cereal maker for $660 million
WESTCHESTER, ILL. - TreeHouse
Foods has signed an agreement to acquire Sturm Foods from HM Capital
Partners L.L.C. and other shareholders for approximately $660 million.
Founded in 1905, Sturm Foods primarily makes hot cereals, powdered
soft drink mixes and other dry mix
products for the private label market.
HM Capitals has owned Sturm Foods
since May 2005.
"Sturm Foods is a significant addition to TreeHouse, both strategically
and financially," said Sam K. Reed,
chairman and chief executive officer
of TreeHouse. "Sturm will give us the
leadership position within the private
label hot cereal and powdered soft
drink mix categories. Both categories
are large and growing, offer health
and convenience benefits, and have
significant private label shares of 26%
and 20%, respectively."
According to TreeHouse, the acquisition of Sturm Foods will add
$340 million in annual sales, boosting TreeHouse's pro forma sales to
approximately $1.9 billion and adjusted EBITDA to more than $275
million. The transaction is expected
to be more than 16% accretive on an
annualized basis, adding 38c to 40c
in earnings per share.

TreeHouse said it plans to fund the
acquisition through a combination
of $400 million in new debt issuance,
approximately $100 million in equity
stock issuance, and the balance funded
from borrowings under the company's
existing revolving credit facility. The
acquisition is expected to close by
March 31, 2010, and TreeHouse said
it anticipates $19 million in one-time
costs associated with the transaction.
"With the addition of Sturm,
TreeHouse will have the top market
share in six complementary private
label categories, and we will further
expand our center-of-store offerings,
where grocery sales and profits are
driven," Mr. Reed said. "We also see
meaningful opportunities to further
develop Sturm's category presence in
non-traditional retail channels, food
service and Canada, while leveraging
their innovative R.&D. capabilities
and generating attractive procurement savings."
Sturm Foods has 750 employees and
operates three facilities in Manawa, Wis.
The company sells to both retail and
food service customers, and the bulk
of its product portfolio is evenly mixed
between hot cereals and powdered soft
drink mixes. In addition to private label
products, the company offers several

Franz Bakery recognized for
energy savings efforts
PORTLAND, ORE. - Franz Bakery
has received an Energy Champion
award from the U.S. Department of
Energy (D.O.E.) for achieving more
than 250,000 million Btu total energy
savings, or more than 15% total energy
savings, at its plant in Portland. Franz

Bakery is the largest independent
baking company in the Northwest,
producing fresh baked foods for distribution to grocery, restaurant, food
service and institutional customers.
"This is a tremendous recognition,
and I am really proud of our team for

General Mills raises quarterly dividend 4%
MINNEAPOLIS - The board of directors of General Mills, Inc. has
raised its quarterly dividend rate to
49c per share from 47c per share, effective with the dividend payable
Feb. 1, 2010, to shareholders of record
as of Jan. 11, 2010. With the increase,
General Mills said dividends paid
common shareholders in fiscal 2010
are expected to total $1.92 per share,
up 12% from dividends of $1.72 per
share paid in fiscal 2009.
This is the second quarterly
bakingbusiness.com / world-grain.com

dividend rate increase declared during fiscal 2010. The prior quarterly
rate of 47c per share was established
with the August 2009 payment.
"Over the past five fiscal years, General Mills shareholder dividends have
grown at a 9% compound rate," said
Ken Powell, chairman and chief executive officer. "Our leading food brands
are performing well despite the challenging economic environment, and
today's announcement reflects this
fundamental business strength." MBN

Business

branded products, including McCann's
Irish Oatmeal, Vita Splash, Fulfil Fitness, Power Edge, Morning Spark, Replenish and Moo Magic.
Apart from the planned transaction, TreeHouse raised its 2009 fullyear earnings-per-share guidance to

$2.10 to $2.12, up from $2.07 to $2.09.
"We continue to generate excellent
top-line growth and benefit from our
cost-savings programs in the fourth
quarter," Mr. Reed said. "Our results
demonstrate that grocery customers
and consumers are committed to the
proposition of high-quality private label products at value prices." MBN
identifying and implementing environmentally-conscious changes to the way
we do business," said Marc Albers,
president and chief executive officer
of Franz Bakery. "We have taken many
steps - including the installation of an
oxidizer - to make our facility more
eco-friendly and keep our city and the
environment as clean as we can."
To achieve the recognition, Franz Bakery had to complete a Save Energy Now
energy assessment with the D.O.E. Industrial Technologies Program (I.T.P.) in 2008.
Save Energy Now is a national initiative
of the I.T.P. designed to drive a reduction
of 25% or more in industrial energy intensity in 10 years. Companies that partner with the D.O.E. may use the I.T.P.'s
resources to reduce energy use and improve efficiency, while increasing profits.
As of September, the D.O.E. had
completed nearly 2,400 Save Energy
Now assessments, resulting in an annual implemented savings of $218
million in energy, 16 trillion Btu in natural gas, and a reduction in 2.3 million
tonnes of carbon dioxide emissions. MBN
Milling & Baking News December 29, 2009 / 9

http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - December 29, 2009

Table of Contents for the Digital Edition of Milling & Baking News - December 29, 2009