Pinnacle set to buy Birds Eye Foods

Frozen vegetables from Bird's Eye Foods


Steve Chiotakis: Somebody at Pinnacle Brands must've been listening to his or her parents. The Wall Street Journal reports today that the packaged food giant is getting ready to buy Birds Eye Foods, the biggest frozen vegetable producer in the country, for more than $1.3 billion. Marketplace's Alisa Roth is with us live from our New York bureau. Good morning, Alisa.

Alisa Roth: Good morning.

Chiotakis: Tell us about these companies involved in the deal.

Roth: Birds Eye, as you mentioned, is the biggest frozen vegetable company in the country. It controls about a quarter of the frozen vegetable market. And you can find the stuff in all the big stores -- Wal-Mart, Krueger, Safeway. They also make frozen meals. You definitely know a lot of Pinnacle's brands, it owns Duncan Hines, the cake mix company, Swanson, as in frozen dinners, Mrs. Butterworth's pancake syrup. Now one of the interesting things about this deal is that both companies are owned by private equity firms. In Birds Eye's case, it's Vestar Capital Partners. Pinnacle is owned by Blackstone.

Chiotakis: All right, private equity. So what's the significance of private equity in all of this?

Roth: Well for the last couple of years, private equity firms have been pretty reluctant to make any deals, and lately there've been some signs that that's starting to change. So this is another sign. The other thing is that Birds Eye has about $700 million in debt. And last month, it filed to launch an IPO so that it would raise money to pay down some of that debt. If it gets bought, it won't have to do that.

Chiotakis: All right. Marketplace's Alisa Roth, joining us from New York this morning. Alisa, thanks.

Roth: You're welcome.


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