Pinnacle Foods Inc. PF has announced that some of its stockholders intend to make an underwritten secondary offering of 14.3 million shares. These shareholders include affiliates of The Blackstone Group L.P. BX. It should be noted that since no shares are being sold by the company, the proceeds will go to shareholders who make the offering.
Pinnacle expects the offering to close on Mar 13, 2015, subject to customary closing conditions. After completion of the offering, Blackstone's ownership in Pinnacle would reach approximately 4.3%. Credit Suisse Group AG CS is acting as bookrunner for the offering.
In September last year, the company made a similar secondary offering of 15 million shares. These secondary offerings will surely help in increasing public float and liquidity. (Read: Pinnacle Foods Shareholders to Make Secondary Offering).
The company boasts a strong balance sheet. Last month, this food company posted fourth quarter and full year 2014 results and generated operating cash flow of approximately $400 million, excluding the benefit of the termination fee totaling $153 million associated with the terminated merger agreement with The Hillshire Brands Company. (Read: Pinnacle Terminates Hillshire Deal, Makes Way for Tyson). The company also reduced debt by approximately $200 million during the year 2014.
Pinnacle Foods reported in-line earnings and lower-than-expected sales for the fourth quarter of 2014. Adjusted earnings of 64 cents, however, increased 12.3% on the back of higher year-over-year sales. Sales of $705.3 million declined 0.6% versus the year-ago period in the fourth quarter, as a 1% benefit from the Garden Protein acquisition in 2014 and a 0.2% increase from higher net price realization were more than offset by lower volume/mix of 1.6% and unfavorable foreign currency translation of 0.2%.
Pinnacle Foods has a Zacks Rank #3 (Hold). A better-ranked food company is Supervalu, Inc. SVU holding a Zacks Rank #2 (Buy).
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