News: Kraft Selling Water and Juice Brands
The transaction will result in an after-tax charge of $55 million, or $0.03 a share, Northfield-based Kraft said. Financial terms of the sale, which might be completed in the fourth quarter, were not disclosed.
Sunny Delight, based in Cincinnati, will acquire five water and juice lines as well as a Veryfine factory in Littleton, Mass. About 200 employees will join Sunny Delight, Kraft said. The brands had 2006 sales of $135 million.
"For Kraft, we believe we will create greater long-term shareholder value by selling, rather than investing in, these brands," Rick Searer, president of Kraft North America, said in the statement. Kraft's brands range from Oscar Mayer meats to DiGiorno frozen pizza, Nabisco crackers and Sanka coffee.
Sunny Delight is owned by J.W. Childs Associates LP of Boston, a private-equity firm that bought the company from Procter & Gamble Co. in 2004.
The transaction is expected to be completed during the fourth quarter. In anticipation of the sale, Kraft will record a one-time, pre-tax asset impairment charge of approximately $125 million in Q3. The after-tax impact to net earnings is a charge of approximately $55 million, equivalent to 3cents diluted earnings per share. Kraft anticipates no material impact to earnings on an ongoing basis.
From the October 8, 2007, Prepared Foods e-Flash