Del Monte Lbo
Del Monte Foods Company LBO Deal Report
1. Del Monte Foods Company (DLM or ‘the company’) is one of US 's largest producers, distributors and marketers of premium quality, branded pet products and food products for the retail market. It is the world’s sixth largest manufacturer of preserved food, and the leading producer of both preserved fruit and preserved tomatoes . Its pet products segment includes brands like Meow Mix, Kibbles n Bits, Milk-Bone, 9Lives, Pup-Peroni, Gravy Train, Nature 's Recipe, Canine Carry Outs, and Milo 's Kitchen, while its food products segment includes brands like Contadina, S&W, and College Inn. It sells these products to the retail markets via grocery chains, club stores, supercenters and mass merchandisers; and also to certain export markets, the foodservice industry and other food processors. In FY2010, at 53.2% of $3739.8MM total revenues, the food products segment was marginally larger than the pet products segment. The pet products segment had however out-performed the food products segment by recording an annual revenue growth of 4.6% compared to 1.9% for the food segment over FY2009 figures .
With almost 95% of its revenues coming from the US market , DLM has a huge reliance on this market and thus faces the risk of its revenues being severely impacted by the performance of the US economy and changes in US consumer behaviour. Challenging economic conditions have forced consumers in the US to become ‘value shoppers’, thus leading to the growth of discounters and private labels. Although the US consumer products industry has shown stable growth over the years, companies like DLM are increasingly facing high competition that makes it harder for companies to differentiate their products in a saturated market like the US and at the same time demand prices that could cover costs and provide margins. DLM thus recorded only 2.8% growth in revenues in the US market as compared to 9% growth in the foreign markets between
1. Del Monte Foods Company (DLM or ‘the company’) is one of US 's largest producers, distributors and marketers of premium quality, branded pet products and food products for the retail market. It is the world’s sixth largest manufacturer of preserved food, and the leading producer of both preserved fruit and preserved tomatoes . Its pet products segment includes brands like Meow Mix, Kibbles n Bits, Milk-Bone, 9Lives, Pup-Peroni, Gravy Train, Nature 's Recipe, Canine Carry Outs, and Milo 's Kitchen, while its food products segment includes brands like Contadina, S&W, and College Inn. It sells these products to the retail markets via grocery chains, club stores, supercenters and mass merchandisers; and also to certain export markets, the foodservice industry and other food processors. In FY2010, at 53.2% of $3739.8MM total revenues, the food products segment was marginally larger than the pet products segment. The pet products segment had however out-performed the food products segment by recording an annual revenue growth of 4.6% compared to 1.9% for the food segment over FY2009 figures .
With almost 95% of its revenues coming from the US market , DLM has a huge reliance on this market and thus faces the risk of its revenues being severely impacted by the performance of the US economy and changes in US consumer behaviour. Challenging economic conditions have forced consumers in the US to become ‘value shoppers’, thus leading to the growth of discounters and private labels. Although the US consumer products industry has shown stable growth over the years, companies like DLM are increasingly facing high competition that makes it harder for companies to differentiate their products in a saturated market like the US and at the same time demand prices that could cover costs and provide margins. DLM thus recorded only 2.8% growth in revenues in the US market as compared to 9% growth in the foreign markets between