Reuters — ConAgra Foods has hired Centerview Partners to explore a sale of its private label unit Ralcorp, just two years after it acquired the troubled business with advice from the same investment bank, people familiar with the matter said.
The maker of Chef Boyardee and Slim Jim snacks, which last month announced it would exit its private label food business, also has hired Goldman Sachs Group to provide additional advice on the sale, the people said this week.
Representatives for ConAgra, Centerview and Goldman declined to comment.
ConAgra relied on Centerview and Bank of America for advice when it acquired Ralcorp in January 2013 for US$5.1 billion. Goldman advised Ralcorp alongside Barclays Plc.
At the time, the deal was viewed as a personal success for then-ConAgra CEO Gary Rodkin, who had pursued Ralcorp for more than a year and a half.
But Ralcorp, which makes private-label cereal, pasta, crackers, jams and jellies, syrups and frozen waffles, has been plagued with problems ranging from customer service issues to pricing concessions. Sales have fallen nearly six per cent in the past two years.
Ralcorp’s assets in Canada include waffle and pancake plants at Delta, B.C. and Brantford, Ont., and cracker plants at Kitchener and Georgetown, Ont., all acquired by Ralcorp in 2010.
Activist fund Jana Partners announced a 7.2 per cent stake in ConAgra last month and said it would push to nominate directors to the company’s board that supported its desire to exit the private label business.
ConAgra CEO Sean Connolly, who joined the company in April, has said the effort to fix Ralcorp was draining resources.
“We know that the inconsistency of our past performance is totally unacceptable,” Connolly said in an earnings call last month.
— Reporting for Reuters by Lauren Hirsch and Olivia Oran in New York. Includes files from AGCanada.com Network staff.