Packaged-food company Pinnacle Brands Corp., owned by New York-based Blackstone Group (BX), is expected to acquire U.S. frozen-vegetable and meals company Birds Eye Foods for more than $1.3 billion, the Wall Street Journal reported Thursday citing people familiar with the matter. The all-cash deal is likely to be announced as soon as Thursday. Financing details were not available, the report said.
Blackstone, a provider of alternative asset management and financial advisory services, acquired New Jersey-based Pinnacle in 2007 for $2.2 billion.
Birds Eye, based in Rochester, New York is majority owned by the private-equity firm Vestar Capital Partners, the WSJ stated. It is also 40% owned by New York-based agricultural cooperative Pro-Fac.
According to the report, Birds Eye, which carries about $700 million in long-term debt, was acquired by Vestar in 2002. The company has about 1,700 full-time employees and owns about 25% of the frozen-vegetable market in the US.
WSJ said that the deal signals private-equity funds' willingness to make more acquisitions after a tumultuous two-year period. Further, the purchase hints that lenders are willing to lend at higher leverage levels.
BX closed Wednesday's trading at $15.55, up $0.26, on a volume of 3.55 million shares.
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