TreeHouse Buying Salsa Maker for Nearly $89M

SAN ANTONIO-TreeHouse Foods Inc. has entered into a definitive agreement with Silver Ventures Inc. to acquire San Antonio Farms, a maker of Mexican sauces. TreeHouse, headquartered in Westchester, IL, will pay $88.5 million in cash for the business plus an adjustment for working capital.

Silver Ventures purchased the company and its distribution center at 5310 Old Hwy. 90 West in 2002 with a goal to help it grow. “It’s been successful. When TreeHouse came to us, we thought it would be a good combination for San Antonio and TreeHouse,” says Ken Halliday, COO for Silver Ventures, a private investment company in San Antonio. “They have a national focus; they’re experts in food; and we feel they’re the right folks to help San Antonio Farms grow more in the long term.”

Halliday tells GlobeSt.com that he’s not aware of any major changes to operations or re-branding with the transaction for the 100-employee operation. The San Antonio Farms headquarters will remain in San Antonio.

The acquisition, timed to close within 45 days, will be financed through borrowings under TreeHouse’s $500-million credit facility. In a press release announcing the acquisition, TreeHouse chairman and CEO Sam K. Reed says Mexican sauces are experiencing growth, with private-label Mexican sauces growing faster than the total category, which is why the transaction made sense for TreeHouse.

“San Antonio Farms is a well-managed company with premium products, a history of profitable growth with talented and dedicated employees,” Reed says in the release. The transaction will be neutral to this year’s earnings, but projected to add about 5 cents per share to 2998 earnings. Calls to TreeHouse were not returned by deadline.

Brown, Gibbons Lang & Co. LP of Cleveland is TreeHouse’s financial adviser. Lincoln International LLC of Chicago represents San Antonio Farms and Silver Ventures on the transaction.

San Antonio Farms provides private-label Mexican sauces for one-third of the country’s top 10 grocery chains. It also provides sauces for restaurants like Chili’s and Ruby Tuesday and distributes to customers in Japan, Korea, Mexico and Canada.