Conagra Foods: Valuing a Potential Recipe for Success
OPEN ACCESS International Food and Agribusiness Management Review Volume 21 Issue 5, 2018; DOI: 10.22434/IFAMR2016.0182 Received: 19 December 2016 / Accepted: 10 September 2017 ConAgra Foods: valuing a potential recipe for success Special issue: Teaching case studies in food and agribusiness management CASE STUDY Susan Whitea, Carlos Trejo-Pech b, and Magdy Noguerac aClinical Professor of Finance, Robert H. Smith School of Business, University of Maryland, 4455 Van Munching Hall, College Park, MD 20742, USA bAssistant Professor of Agribusiness Finance, Department of Agricultural and Resource Economics, The University of Tennessee, 2621 Morgan Circle Drive, 308D Morgan Hall, Knoxville, TN 37996, USA; Adjunct Professor of Finance, Universidad Panamericana, Escuela de Ciencias Económicas y Empresariales, Universidad Panamericana at Guadalajara, Calz. Circ. Pte. 49, Zapopan, 45010 Jalisco, Mexico cAssociate Professor of Finance, College of Business and Economics, University of Idaho, 875 Perimeter Drive MS 3161, Moscow, ID 83844-3161, USA Abstract In the fall of 2012, ConAgra Foods had the opportunity to become the largest private-label packaged food producer in North America. ConAgra was considering the purchase of Ralcorp, a large private brands manufacturer. This could be a strategic step for ConAgra, since the potential acquisition seemed aligned to the firm’s strategy for growth. Ralcorp, with revenue and assets representing about one third of ConAgra’s, was large enough to impact ConAgra’s business strategy and financial structure. This case study provides both firm level and private brands industry data to assess the potential acquisition. Ranges of implied stock prices could be estimated by using Discounted Cash Flow Valuation, Comparable Multiples, and Comparable Merger and Acquisitions Transaction analysis.
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