Del Monte gets senior debt financing commitment for Milk-Bone purchase

By Sara Rosenberg

New York, March 16 - Del Monte Corp. has received commitments for senior debt financing to fund its acquisition of certain pet product assets, including the Milk-Bone dog snack brand, from Kraft Foods Global Inc. for about $580 million, according to a company news release.

Following the Milk Bone acquisition and including the recently announced Meow Mix Holdings Inc. purchase, Del Monte's debt to EBITDA is expected to be around 4 times in fiscal 2007, company officials said in a conference call Thursday.

However, assuming that most post-acquisition cash flow will be used to pay down debt, debt to EBITDA is expected to return to the 2 times to 3 times area within three years, officials added in the call.

On March 2, Del Monte announced that it agreed to purchase cat food maker Meow Mix from The Cypress Group for about $705 million.

The Meow Mix acquisition will be funded with about $300 million in debt, proceeds from the divestiture of TreeHouse Foods Inc. and cash from operations.

Both the Milk Bone and the Meow Mix transactions are expected to close in fiscal 2007, subject to the satisfaction of regulatory approvals and customary closing conditions.

Goldman, Sachs & Co. and Banc of America Securities LLC are acting as financial advisers to Del Monte on the Milk Bone deal and Lehman Brothers Inc. is acting as financial advisor to Del Monte on the Meow Mix deal.

Del Monte is a San Francisco-based producer, distributor and marketer of branded and private label food and pet products.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.