Conagra Brands (CAG) may be boiling up another sweltering deal.
The packaged food giant is in talks to sell its Hebrew National hot dog brand to JBS SA in Brazil, according to a report by The Wall Street Journal. An agreement could also include the brands Egg Beaters and Odom’s Tennessee Pride, the report said. The total amount for the brands is apparently $ 700 million.
Conagra has been a transaction machine since CEO Sean Connolly in 2015. Connolly has moved aggressively to reform the portfolio, allowing Conagra to play into new, faster-growing eating trends – namely an increase in snacking and millennials eating more frozen food. All three of the brands reportedly on the sales block generally do not play in the consumption trends.
A spokeswoman for Conagra Brands declined to comment on the report to Yahoo Finance.
Conagra acquired the well-known Hebrew national and Egg Beaters brands in 1993 and 1998, respectively. According to a source, Yahoo Finance, Hebrew National, Egg Beaters and Odom’s have achieved nearly $ 550 million in sales over the past twelve months.
For Conagra shareholders, the potential sale of these three brands should not come as a shock.
Since November 2015, Conagra has been selling private label food businesses, the Wesson oil industry and Peter Pan nut butter business. Instead, Connolly Pinnacle bought frozen food in 2018 for $ 10.9 billion and Angie’s popcorn maker in 2017 for an undisclosed amount.
“When you think about our key growth priorities, you’re quite looking at frozen and snacking. These are our two priority areas, not that we would not consider a bolt on. [acquisition] elsewhere. “But this is usually where we want to look to strengthen our business first because we believe we have a tremendous run in the two vertical directions,” Connolly told Yahoo Finance Live in mid-January.
The street would like Conagra under the guise of hot dogs and liquid eggs.
“This will represent another step towards improving the Conagra portfolio,” said Robert Sukow, analyst at Credit Suisse. “Before the pandemic, the two meat brands declined at a 3% CAGR of three years, and Egg Beaters declined double-digit.”
Brian Sozzi is a general editor and anchor by Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and so on LinkedIn.
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