May 3, 2013 8:53 pm

Unilever to divest Wish-Bone via Goldman Sachs

This article is provided to readers by mergermarket—a news service focused on providing actionable, origination intelligence to M&A professionals.

Unilever, (NYSE:UN) the Netherlands-based consumer conglomerate, has retained Goldman Sachs to sell its Wish-Bone brand salad dressing business, a source familiar with the matter and three industry bankers told Mergermarket.

The process is at an early stage with confidentiality agreements not yet out to prospective bidders, said the source.

Spokespeople for Unilever did not return calls for comment and a spokesperson at Goldman declined to comment.

Unilever does not break out Wish-Bone’s financials. The price that Unilever wanted for the property could not be ascertained. On the 4Q 2012 earnings call, Unilever CEO Paul Polman told investors the company would continue to sell non-core food products, and it would examine products with EUR 500m to EUR 700m in revenues that are not global businesses and do not have the potential for global expansion.

Two of the industry bankers said that Ragu could be a logical divestiture candidate as well. However, the source said the iconic pasta and pizza sauce brand was not for sale at this time. Ragu is seen to be more of a global brand, versus North America-focused Wish-Bone the source said. On 19 March, Mergermarket reported that both Wish-Bone and Ragu pasta sauces were the next food brands on Unilever’s list of divestitures.

Ragu pasta sauce is a sizeable brand with revenues in the hundreds of millions, said the first industry banker; Wish-Bone is the company’s major US brand of salad dressings, according to Unilever’s website.

On the company’s 23 January 2013 conference call, CEO Paul Polman said it continued to shed “non-core and margin-dilutive parts of the food portfolio.” On the earnings call, Polman also said the company’s food holdings were comprised of three core businesses: margarines, dressings and savory. Unilever reports results for ice cream and Lipton Tea brands separately under a segment called ‘refreshment’ in its earnings reports.

One possible buyer for Wish-Bone could be Pinnacle Foods (NYSE:PF), as the Parsippany, New Jersey-based company is focused on the center of the grocery store, where Wish-Bone is stocked, said the banker.


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