MANILA, Philippines - A subsidiary of Del Monte Foods Inc. (DMFI), owner of the Del Monte brand rights in the United States and South America, has acquired the vegetable business of US-based manufacturer Sager Creek Vegetable Co. for $75 million.
In a disclosure to the local bourse, Del Monte Pacific Ltd. (DMPL) said DMFI subsidiary Vegetable Acquisition Corp. has purchased Sager Creek’s vegetable business in San Francisco, California.
The assets acquired include property, plant and equipment, intellectual property and certain working capital assets but excluding accounts receivable.
DMPL said the acquisition cost was determined through an auction process and negotiations between the parties.
“The acquisition cost will be financed through DMFI’s revolving credit facility, the payment for which will be secured by the acquired assets,” DMPL said.
DMPL, controlled by the Campos family, acquired in February last year DMFI for about $1.7 billion.
“The acquisition of Sager Creek’s business provides Del Monte access to new customers and new retail product offerings and the opportunity to expand on Sager Creek’s food service business platform, while driving significant operating synergies in our network of vegetable production facilities,” DMPL said.
Sager Creek is a producer of specialty vegetables for the food service and retail markets headquartered in Siloam Springs, Arkansas.
The US-based manufacturer, which in 2014 acquired the business of Allen Canning in a bankruptcy proceeding, has manufacturing operations located in North Carolina, Arkansas and Wisconsin.