NEW YORK - Blackstone Group’s Pinnacle Foods Group agreed to buy Birds Eye Foods Inc., the largest US frozen-vegetable company, for $1.3 billion, adding to its Duncan Hines and Swanson food brands as the pace of buyouts increases.
The transaction should close by the first quarter of next year, Pinnacle said yesterday. The deal will be funded with new debt financing at the company and an equity contribution from New York-based Blackstone, the world’s biggest private-equity company.
The Birds Eye purchase is the seventh-largest US private equity deal of 2009 and Blackstone’s second-biggest of the year, after its planned acquisition of Anheuser-Busch InBev NV’s theme-park business for as much as $2.7 billion, according to data compiled by Bloomberg.
Based in Rochester, N.Y., Birds Eye has annual sales of more than $930 million and said it holds a 27 percent share of the US market for frozen vegetables.
It is currently owned by Pro-Fac Cooperate Inc., a New York agricultural cooperative; funds affiliated with Vestar Capital Partners, a New York-based buyout firm; and Birds Eye management.
They bought the company about seven years ago and increased spending on marketing, research and development, and new products, Brian Ratzan, a Vestar managing director, said.
“This is a well-known, extendable brand, and the company has only begun to take advantage of that brand,’’ he said.
Birds Eye filed last month for an initial public offering, a move that sparked interest from buyers, Ratzan said.
As a result of the Blackstone deal, the public offering will be withdrawn.
In the fiscal year ended June 27, the company recorded net income of $53.6 million on sales of $935.6 million, according to the IPO filing. The company had long-term debt of $706.8 million, the filing showed.
Debt financing for the purchase will consist of senior secured credit facilities and senior unsecured bonds.
