ConAgra to buy Del Monte Canada

MISSISSAUGA—ConAgra Foods announced Tuesday that it has made a deal to buy Del Monte Canada and thus add more products and another category to its food portfolio.

For an undisclosed price, U.S.-based ConAgra will obtain all Del Monte packaged fruit and vegetable products, as well as Aylmer tomato products in Canada.

The seller is Sun Capital Partners, based in Boca Raton, FL. EG Capital Group LLC of New York is also selling a minority stake in Del Monte Canada as part of the transaction.

Besides the Del Monte and Aylmer brands, ConAgra will acquire a plant in Dresden, ON and offices in Toronto.

ConAgra Foods chief executive officer Gary Rodkin said in a release that the acquisition of Del Monte “will grow our position in North American tomato products, expand our vegetable product line and add packaged fruit and fruit snacks to our portfolio."

Based in Mississauga, ON, ConAgra Foods Canada Inc. has three locations in Canada producing brands such as Healthy Choice, Orville Redenbachers’s, Hunt’s, Snack Pack, Chef Boyardee, Pam,  POGO, VH and others.

ConAgra division ConAgra Lamb Weston, supplies a wide variety of frozen potato products, appetizers, snacks and vegetable products to foodservice and retail industries. It does business as Lamb-Weston Inc.

With the takeover of Del Monte Canada, ConAgra is not getting all its Canadian brands. Sun Capital will hold onto fresh produce, juices and Aylmer soups.

Sun Capital stated that when its bought Del Monte Canada  in 2006—then called CanGro Foods—it was “a collection of underperforming, non–core food businesses operated by Kraft.”

The investment firm said it successfully turned the business around, with management “focused consistently on driving product innovation, including the introduction of roll–up and frozen fruit snacks and transitioning to plastic packaging instead of using metal cans.”

The company also started focusing on higher-margin products.

“As a result of all efforts, Del Monte’s performance dramatically improved over the past five years, from a money losing business to a highly profitable company today,” said Sun Capital.

In fiscal 2011 Del Monte Canada pulled in revenue of about $150 million.

Sun Capital said that Del Monte Canada  is the market  leader in canned fruit and tomatoes  in Canada  and number two in canned vegetables. which it sells under the Del Monte and Aylmer brands, as well as leading in the refrigerated  fruit and fruit snack categories with the Del Monte brand.

The companies gave no expected date for the closing of the sale which is subject to a number of conditions, including regulatory approval.