Consortium Buys Pet Food Giant For $4 Billion

San Francisco, CA, United States (AHN) – A consortium led by Kohlberg Kravis Roberts has announced it is buying pet food giant Del Monte Foods for $4 billion. Del Monte manufactures Meow Mix and Kibbles ‘n Bits. It is the same company that produces canned fruits and vegetables.

The consortium is made up of KKR, Vestar Capital Partners and Centerview Partners, which will pay $19 per share in cash. The group will also assume Del Monte’s $1.3 billion net debt.

Although the brand Del Monte is synonymous with canned and fresh fruits, the pet food business has been the one that has been making money for the firm the past few years. Income from pet food products went up 4.6 percent in 2009, which is twice the revenue growth rate of the canned fruits unit. The pet food group contributed almost 50 percent of Del Monte’s $3.74 billion revenue last year.

Analysts said the consortium likely bought Del Monte for the pet food business than canned fruits because the recession ironically saw a dip in canned fruits sale and a rise in pet food business.

The sale is expected to close in March. Del Monte has until Jan. 8 to accept a better offer for the company under the go-shop period.

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