Hi Richard - Here are some possible acquisition candidates for CAG discussed in the media.
ConAgra Looking at ‘a Number’ of Acquisition Targets
By Matthew Boyle - Sep 20, 2011
bloomberg.com
From the article:"...Takeovers are “very high on our radar screen,” Rodkin said today on a conference call, a day after ConAgra dropped its $5.18 billion bid for Ralcorp, ending a pursuit that began in March. “We certainly do have a number of different initiatives that we are looking at,” said Rodkin, who also reiterated that the company is “still focused on private label.” He declined to identify potential targets for ConAgra, which today also reported quarterly profit that missed analysts’ estimates.
ConAgra, based in Omaha, Nebraska, is seeking to boost sales of less expensive, store-brand foods as some shoppers trade down because of the weak economy. Possible takeover targets include TreeHouse Foods Inc. (THS), Snyders-Lance Inc., or J&J Snack Foods Corp., according to Alexia Howard, an analyst at Sanford C. Bernstein in New York...".
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These are the stocks discussed in the article: THS JJSF LNCE
finance.yahoo.com
If I was forced to choose one based on their "Value" Metric it would be J & J Snack Foods Corp. (NasdaqGS: JJSF). However, I think there are other private label branded companies that could be had at a better value and transitioned into a good line for CAG. Many of these companies are selling at PE's in the high teens low 20's and are just not that cheap. I do suspect they will stay with cereal and/or grain related snack foods and not venture into meat, pork or poultry products. It's possible they might venture into fruits & vegetables. A lot depends on the distribution channels they get in an acquisition.
Seneca Foods Corp. (SENEA) is one name that has been discussed on the thread in the past. They actually have a lot of good physical "plant" manufacturing assets and could probably be bought for BV (ie $28/share). If they combine this company w/ a cereal and/or grain/chip/cracker line, they would have quite a few bases covered. It would take a good management team to marry the best features of each company into a "private label" division but each group have unique distribution channels that would complement the whole. Lot's of growth expansion especially with SENEA's government/school accounts.
To me, that's were CAG's $5B could add significant value and an experienced management team should be able to knit all the pieces together.
EKS |
