NEW YORK (TheStreet) -- Shares of TreeHouse Foods Inc. (THS) are higher by 5.12% to $83.89 in pre-market trading on Monday morning after the company announced it will purchase Flagstone Foods, a privately held company, for $860 million.
TreeHouse Foods, a food manufacturer servicing the retail grocery and foodservice industries, expects the purchase of Flagstone, a healthy snacks, dried fruit, and nut distributer, to increase annual revenue by approximately $750 million.
The company believes the acquisition will have an impact of five to eight cents on 2014 earnings, and add approximately 24 to 28 cents in EPS the first full year after the deal is closed.
TreeHouse is estimating its pro-forma annual sales will approach $3.5 billion, and adjusted EBITDA could exceed $450 million. The deal is expected to close in the 2014 third quarter.
Must Read: Warren Buffett's 25 Favorite Stocks
Separately, TheStreet Ratings team rates TREEHOUSE FOODS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate TREEHOUSE FOODS INC (THS) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."