Dive Brief:
- Unilever is selling its Ragú and Bertolli pasta sauce brands to Mizkan Group for $2.15 billion in an all-cash deal.
- Mizkan, which is looking to expand beyond its home market in Japan, picks up two North American manufacturing facilities in the transaction.
- Unilever said it will use the proceeds to fund its recent buyout of share rights held by family trusts tied to one of the company's co-founders. The Anglo-Dutch conglomerate said it will use the remainder of the proceeds to fund bolt-on acquisitions.
Dive Insight:
Unilever is intent upon revamping its North American operations, and it was quite open in its desire to sell off Ragú and Bertolli. But those are popular brands (Ragú is the top-selling pasta sauce in the U.S.) with combined annual sales of $600 million, and perhaps some growth potential. That means Unilever sold the pasta brands at about 3.5 times revenue.
Unilever is also looking to sell off SlimFast...and has set an asking price of $1.7 billion for a brand with only $300 million in annual revenue and far-less encouraging potential for growth. That means Unilever is looking to sell the weight-loss brand at about 5.6 times earnings.