The company touts its innovative foods like the Duncan Hines frosting creations, but in my observation, the product remains untouched on the grocery shelves. Cotton candy frosting hasn't been in big demand in the 'burbs. Then there's the Birds Eye Voila skillet dinners. Each one is a variation of chicken, broccoli, pasta or rice of some sort and an ethnic twist like teriyaki. The freezer case is filled with this idea and each one tends to be fairly disappointing in flavor. So it seems a stretch to bet the farm on these innovations.

It seems fair to compare Pinnacle to B&G Foods which has a debt-to-cap ratio of 1.57 and a debt-to-EBITDA of 3.8. Pinnacle's debt-to-EBITDA is 6.7. IPO Desktop President Francis Gaskins believes Pinnacle could do a secondary to repay some of its debt or use the free cash flow. However, Pinnacle is also choosing to pay a generous dividend to shareholders of 18 cents. That dividend will cost $113 million annually. Gaskins believes it will be a well-received offering, whose shares will move up.

"They do have revenue, they do have a bottom line, I would venture a guess by the size there will be institutional interest," said John Thompson of IPOScoop. He went on to point out that the sector has been very good this year. The Dow Jones Food Products sector is up 17% for the past year.

So it seems the general public and the institutional investors are ready to gobble up Pinnacle shares and ignore its debt levels. But it could still end up like Diamond Foods ( DMND). Diamond Foods has debt-to-EDITDA of 15.3 and was highly sought after during its IPO. However, it faltered when its acquisition plans only yielded Pringles. The stock is down 27% this year -- a cautionary tale in the food business.

--Written by Debra Borchardt in New York.

>To contact the writer of this article, click here: Debra Borchardt.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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