TreeHouse Foods in talks with PE firm to sell meal-prep business

TreeHouse Foods may shed its meal-prep unit in an effort to center its business on its flourishing snack and beverage unit, per Bloomberg.

Why it matters: This follows similar moves by other food and beverage players that have divested parts of their businesses to better focus operations on higher-growth areas.

• Snacks have become a more popular part of the pantry due to shifting consumer tastes that favor bites on the go, serve as replacement meals, or reinforce healthier eating habits.

Driving the news: The private-label grocer is in exclusive talks with Italian private equity firm Investindustrial to sell its meal-prep business for about $1.3 billion, including debt, Bloomberg reports.

Context: Kellogg is planning to spin off its North American cereal and plant-based foods units while keeping its global snacking business intact.

• Last year Kraft Heinz completed the sale of part of its cheese business to France’s Lactalis in a bid to simplify its business.
• PepsiCo said in August that funds from the sale of its Tropicana and other juice brands in North America to a French PE firm would go toward developing and expanding its health-focused snacks and zero-calorie beverages portfolio.

Flashback: TreeHouse reached a settlement with Jana Partners in April that gave the activist investor a board seat.

• Jana had for more than a year pressured the company to consider several strategic options, including selling itself entirely.
• TreeHouse planted the seed last year that it was exploring the sale of a portion of its meal-prep business after launching a strategic review. (It opted not to sell itself completely earlier this year.)

TreeHouse and Investindustrial representatives couldn’t immediately be reached for comment.