Hillshire Brands to Buy Pinnacle Foods for $4.3B

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Deal of the Week: Hillshire Brands to Buy Pinnacle Foods 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 Jimmy Dean, Ball Park, Hillshire Farm, State Fair, Sara Lee, and Chef Pierre Formerly known as Sara Lee Corporation, 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 Chicago, 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: Birds Eye 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 Log Cabin syrup, 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 [email protected] www.pillarsofwallstreet.com .

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