NEW YORK (TheStreet) -- Shares of Pinnacle Foods Inc. (PF) are soaring, up 20.33% to $36.64, in pre-market trade after it was announced that Hillshire Brands (HSH) will acquire all outstanding shares of the company in a cash and stock transaction for about $4.3 billion.
Hillshire Brands stock is up 2.96% to $38.05 in pre-market trade.
Under the terms of the agreement, each share of Pinnacle Foods common stock will be exchanged for $18.00 in cash and 0.50 shares of Hillshire Brands common stock.
The total enterprise value of the transaction is approximately $6.6 billion, including Pinnacle Foods' outstanding net debt, which reflects an adjusted EBITDA multiple of 9.6x.
The fixed exchange ratio of 0.50 shares of Hillshire Brands common stock was determined based on the ten day average closing price of Hillshire Brands as of May 9, 2014. The implied purchase price based on this average is $36.02 per share and represents an 18% premium to the price of Pinnacle Foods' common stock based on the closing price on May 9, 2014.
In conjunction with the agreement, certain affiliates of Blackstone Group (BX), which collectively hold approximately 51% of Pinnacle Foods' outstanding common stock, have entered into a voting agreement and, subject to its terms and conditions, agreed to vote their shares in favor of the transaction.