Deal of the Week: to Buy for $4.3B

Announcement Date  May 12, 2014 Acquirer  The Hillshire Brands Company (NYSE: HSH) Acquirer Description  Manufactures and markets meat‐centric food solutions worldwide. Sells its products under several brand names including , Ball Park, Hillshire Farm, State Fair, Sara Lee, and Chef Pierre  Formerly known as , the company changed its name to The Hillshire Brands Company in June 2012  The Hillshire Brands Company was founded in 1939 and is headquartered in , Illinois Acquirer Financial  Mkt Cap: $4.5 billion  LTM EBITDA: $541.0 million Statistics  EV: $5.1 billion  LTM EV / Revenue: 1.3x  LTM Revenue: $4.0 billion  LTM EV / EBITDA: 9.4x Target Company  Pinnacle Foods (NYSE: PF) Target Description  Manufactures, markets, and distributes branded convenience food products in North America. Operates through three segments: Frozen, Duncan Hines Grocery and Specialty Foods  Based in Parsippany, New Jersey Price / Consideration  Price: $4.3 billion  Consideration: Cash & Stock Acquirer Advisors  Centerview Partners and Goldman Sachs Target Advisors  Bank of America Merrill Lynch and Blackstone Advisory Partners Rationale  The deal will combine Pinnacle, which owns brands including Duncan Hines and , with Hillshire, which has brands including Jimmy Dean and Sara Lee  Together, the companies will have annual revenue of about $6.6 billion  The combination with Hillshire is expected to produce $140 million in annual savings from improving the supply chain and consolidating expenses Deal Points  Pinnacle stockholders will receive $18 in cash for each share held, along with 0.50 of a Hillshire share for each Pinnacle share. The total amount is almost 20% higher than Pinnacle’s closing price on May 9  After the deal is completed, Pinnacle shareholders will own about 33% of the combined company  Including debt, the deal is worth about $6.6 billion Of Note  The acquisition is Hillshire’s third in the past year as it works to reduce the company’s dependence on Jimmy Dean meats and add the healthy products consumers are increasingly seeking  Pinnacle is selling itself after only about a year as a publicly traded company. Blackstone Group LP (BX) had acquired the foodmaker for $2.2 billion about seven years ago and took it public again in March 2013

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