Kraft Heinz to sell natural cheese business to Parmalat for about $1.23B
The Kraft Heinz Company announced that it has entered into a definitive agreement to sell its Canadian natural cheese business to Parmalat for a purchase price of C$1.62B, or approximately $1.23Bat current FX rates. The agreement includes the sale of natural cheese brands Cracker Barrel, P'tit Quebec and aMOOza! in the Canadian market. The proposed transaction is expected to close in the first half of 2019, subject to regulatory review and approval. Under the terms of the agreement, Kraft Heinz will sell its production facility located in Ingleside, Ontario. Kraft Heinz Canada will also transfer approximately 400 employees from that facility to Parmalat. Kraft Heinz will continue to own and market its other cheese products, including Philadelphia, Cheez Whiz and Kraft Singles, which are processed in Mount Royal, Quebec, where Kraft Heinz Canada employs approximately 900 employees. The Kraft Heinz Company remains steadfast in its commitment to the Canadian market, illustrated by its recent acquisition of the Vancouver-based Ethical Bean coffee brand. Across Canada, Kraft Heinz currently employs approximately 2,000 employees in its facilities and thousands more, indirectly, through its co-manufacturers. The natural cheese business being sold contributed approximately C$560M to Kraft Heinz's net sales in 2017. Kraft Heinz expects to use transaction proceeds primarily to pay down debt, with reduced interest expenses expected to offset the majority of EPS dilution on a run-rate basis.