HM Capital Partners exits Sturm Foods

The purchase price is made up of $400m in new debt issuance, $100m in equity stock, with the remainder funded by TreeHouse’s existing revolving credit facility.

"Sturm will give us the leadership position within the private label hot cereal and powdered soft drink mix categories. Both categories are large and growing, offer health and convenience benefits, and have significant private label shares of 26 per cent and 20 per cent, respectively,” said Sam K Reed, chairman and CEO, TreeHouse Foods.

According to the company, the US hot cereal sector is worth $1.1bn in sales, and the tea and powdered soft drink mix worth around $1.2bn. During the 2006 to 2008 period, private label hot cereal posted compound annual growth of 12.6 per cent, with private label powdered soft drink mixes growing 24.8 per cent in the same period. Founded in 1905, Sturm specialises in dry groceries.

HM Capital Partners focuses on the energy, food and media sectors. Over the past four years, the firm has executed 22 transactions in the energy sector, representing more than $3bn in transaction value. The firm recently acquired SunTerra Resources, an oil and gas exploration and production company.

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