ConAgra Sells Gilroy Foods & Flavors Operations

OMAHA, Neb.ConAgra Foods Inc. reached an agreement to sell its Gilroy Foods & Flavors dehydrated and vegetable product operations to Olam International for $250 million, subject to final working capital adjustments. The seasoning blends and flavors business and supporting plant operations will remain with ConAgra Foods' Commercial Foods reporting segment following the transaction closing.

Under the terms of the agreement, ConAgra Foods will sell substantially all of the assets of Gilroy Foods & Flavors' dehydrated garlic, onion, capsicum and Controlled Moisture, GardenFrost®, Redi-Made and fresh vegetable operations, all of which are part of the Commercial Foods reporting segment. Sales for those operations were approximately $300 million in fiscal 2010. The transaction is expected to close within 30 to 60 days subject to satisfaction of customary closing conditions, including normal regulatory approvals, with ConAgra Foods continuing to operate the business until that time.

Manufacturing facilities expected to transition to Olam's ownership include Gilroy, Hanford and Modesto, Calif.; Fernley, Nev.; Las Cruces, N.M.; and Umatilla, Ore. A warehouse in King City, Calif., is also included in the sale. Upon the transaction closing, all current employees at these locations will transition to Olam.

Virtually all current employees supporting the dehydrated and vegetable products business located at the Omaha, Neb., headquarters and other satellite locations for Gilroy Foods will transition to Olam.

The agreement does not include the Carol Stream, Ill., Cranbury, N.J., and Hyrum, Utah, facilities, which produce seasoning blends and flavors. ConAgra Foods will maintain full ownership of those plants and continue operations as usual.

Greg Estep, formerly president of this business unit for ConAgra Foods, is expected to become president of spices and dehydrates for Olam International. Paul Maass, president of ConAgra Mills, will assume the additional responsibility of leading the remaining seasoning blends and flavors business under the Spicetec Flavors & Seasonings brand name.