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Hillshire Brands

Pinnacle Foods Inc. announced today that it has entered into a definitive agreement for the sale of the Company to Hillshire Brands (NYSE: HSH) in a transaction to include cash and Hillshire common stock.

Pinnacle Foods brands can be found in more than 85% of American households. Among the Pinnacle brands are the savory snack brands Tim's Cascade Snacks®, Hawaiian® kettle style potato chips, Erin's® popcorn, Snyder of Berlin® and Husman's® snacks

Under the terms of the agreement, Hillshire will acquire all outstanding shares of Pinnacle Foods. Pinnacle stockholders will receive $18.00 in cash for each share held, along with Hillshire common stock at a fixed exchange ratio of 0.50 Hillshire shares for each Pinnacle share. The transaction represents an implied premium of approximately 80% since Pinnacle’s March 28, 2013 IPO. Upon the closing of the transaction, Pinnacle shareholders will own approximately 33% of the combined company. Until the time of the closing, Pinnacle will continue to maintain its current quarterly dividend payments.

The combined company will have annual net revenues of approximately $6.6 billion and be led by current Hillshire President and CEO Sean Connolly.

The transaction, which is subject to customary regulatory and shareholder approvals, is expected to close by September 2014. Certain affiliates of Blackstone, which collectively hold approximately 51% of Pinnacle’s outstanding common stock, have entered into a voting agreement and, subject to its terms and conditions, agreed to vote their shares in favor of the transaction. Upon close of the transaction, Hillshire will appoint a representative from Blackstone to its board.

Pinnacle CEO Bob Gamgort stated, “This transaction speaks to the value Pinnacle employees have created by executing our strategy of Reinvigorating Iconic Brands. The combination of the brand portfolios of Pinnacle and Hillshire creates a powerful food company with broad reach across frozen, refrigerated and grocery categories.”

Prakash A. Melwani, Blackstone Senior Manager Director and Chief Investment Officer, Private Equity, added, “I want to thank the Pinnacle Foods board of directors, management team and employees for their tireless effort and dedication in transforming Pinnacle into the excellent Company it is today. All Pinnacle shareholders have benefitted from the significant value created to date and now have the opportunity to participate in the strength of these combined businesses.”

BofA Merrill Lynch and Blackstone Advisory Partners served as financial advisors to the Company and Simpson Thacher & Bartlett LLP served as legal counsel.