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Pinnacle Foods Inc. To Acquire Iconic Wish-Bone® Salad Dressings

PARSIPPANY, N.J., Aug. 12, 2013 /PRNewswire/ -- Pinnacle Foods (NYSE: PF) today announced that it has entered into a definitive agreement to acquire the Wish-Bone ® salad dressings business from Unilever PLC, in a transaction that is expected to be immediately accretive to Pinnacle.  The acquisition, which is subject to customary closing conditions, is expected to be completed in late Q3 or early Q4 2013.     

Wish-Bone is a leading salad dressing brand, holding the #1 share position in the Italian segment of the category and the #3 position overall.  The portfolio being acquired includes a broad range of liquid and dry-mix salad dressing flavors under the Wish-Bone and Western ® brand names.  The brands have attractive margins and high free cash flow conversion and are expected to immediately enhance Pinnacle margins.  Combined annual sales of the brands being acquired total approximately $190 million

Commenting on the announcement, Pinnacle Foods Chief Executive Officer Bob Gamgort stated, "The acquisition of Wish-Bone is a perfect fit with our successful strategy of 'Reinvigorating Iconic Brands.' In addition to enabling significant cost synergies and tax benefits, the transaction enhances our ability to offer consumers meal solutions and recipe ideas across our broad portfolio of brands. We are excited to apply our innovation capabilities to this great brand."

The purchase price of the transaction is $580 million, which will be funded with cash on hand and new debt.  Given that the acquisition will be structured as an asset purchase, Pinnacle expects to realize approximately $125 million in tax benefits on a net present value basis.   Cost synergies are expected to be substantial, as the Company plans to invest $40-50 million in capital to consolidate production into an existing Pinnacle facility and fully leverage the Company's supply chain.  Unilever will continue to manufacture the brands to be acquired, for a period of time, under a third-party manufacturing agreement.  Synergy realization will be phased over time, beginning in 2014 and ramping up through 2015, as manufacturing is transitioned to Pinnacle.  Full run-rate EBITDA of the acquired business is expected to reach $65 million, once full synergies are realized.   

EPS accretion is expected to grow from a slight impact in 2013 to meaningful levels, beginning in 2014.  Updated 2013 EPS guidance, including the expected impact of the Wish-Bone acquisition, will be provided in the Company's second quarter earnings announcement being released on August 14, 2013.

The Company will host a conference call to discuss the transaction today at 5:00pm (ET).  To access the call, investors and analysts can dial (866) 655-9758 in the U.S. and Canada or (973) 935-8718 from outside the U.S. and Canada and referencing Access Code: 31647397.  A replay of the call will be available, beginning August 12, 2013 at 9:00 PM (ET) until August 22, 2013, by dialing (855) 859-2056 in the U.S. and Canada or (404) 537-3406 from outside the U.S. and Canada and referencing Access Code 31647397.  Access to a live audio webcast and replay of the event will be available in the Investor Center of the Company's corporate website at www.pinnaclefoods.com.

BofA Merrill Lynch is serving as exclusive financial advisor to Pinnacle Foods in connection with this transaction.

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