Food ingredients distributor JM Swank was sold to private equity firm Platinum Equity; and Spicetec was sold to Givaudan for about $340m.
ConAgra chief executive officer Sean Connolly said the sales of the two businesses mark “an important milestone” for the company, adding it will become more focused in the future.
ConAgra announced its plans to pursue the separation of the company into two independent public companies, Conagra Brands (a diverse portfolio of leading brands) and Lamb Weston (a foodservice supplier of frozen potatoes) last year. The transactions are expected to be completed in fall 2016.
“We truly appreciate the contributions of the JM Swank and Spicetec Flavors & Seasonings employees, and we’re confident that both companies will be well positioned for continued growth as part of Platinum Equity and Givaudan, respectively,” Connolly said.
ConAgra, which also owns brands including Orville Redenbacher’s and Fiddle Faddle popcorn, said it generated approximately $488m in combined net proceeds from the sales, subject to any final working capital adjustments.
Consumer Foods segment decline
News of the deals comes four weeks after ConAgra reported a 12% year on year decline in sales from its Consumer Foods segment to $1.7bn, stating it had been focusing on emphasizing profit margins over volume.
It added that, in particular, price increases on certain Banquet branded products as well as improved trade promotion across several areas of its portfolio had reduced volume but favorably impacted margin.