The purchase price is
6 to 7 times the seafood's unit average trailing three-year contributed
Ebitda, the seller said in a statement announcing the deal.
"The divestiture of our seafood business, including StarKist, is a
significant step in the realignment of our portfolio toward higher
margin, higher growth businesses," Rick Wolford, Del Monte's chairman
and chief executive, said in the statement. He added that the deal
will "immediately help improve our margin structure, eliminate a source
of earnings volatility and reduce our debt leverage."
Del Monte said it believes the deal will help it focus on faster-growing, higher-margin businesses. Further, Del Monte said the transaction will be dilutive to its 2009 earnings per share and that it will realize nearly $300 million in after-tax proceeds, which it will use to pay down debt. -
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