TreeHouse Foods Stock Soars on $2.9B Private Buyout Deal
Shares surge over 20% after Investindustrial agrees to acquire the private-label food maker at a significant premium, overshadowing a Q3 earnings miss.
TreeHouse Foods Inc. (NYSE: THS) shares surged more than 20% in morning trading after the private-label food manufacturer announced it had entered into a definitive agreement to be taken private by European investment firm Investindustrial. The all-cash deal values the company at an enterprise value of approximately $2.9 billion, providing a substantial premium for shareholders and marking a new chapter for the food supplier.
Under the terms of the agreement, Investindustrial will acquire all outstanding shares of TreeHouse Foods for $22.50 per share in cash. The offer represents a 38% premium to the company's closing stock price on September 26, 2025, a date referenced in the official announcement as the unaffected share price. In addition to the cash consideration, shareholders will receive one non-transferable Contingent Value Right (CVR) per share, offering potential future upside.
The sharp rally in TreeHouse's stock price came as a stark contrast to the company's third-quarter financial results, which were also released Monday. The company reported earnings and revenue that fell short of analyst expectations, a development that would typically send a stock lower. However, the premium valuation offered by the buyout completely overshadowed the weaker-than-expected quarterly performance, signaling strong investor approval for the transaction.
The acquisition is the culmination of a period of strategic evaluation for TreeHouse Foods, which has been working to streamline its operations and focus on higher-growth areas within the private-label market. "This transaction will provide our shareholders with a compelling cash premium and a CVR that provides the opportunity to participate in the potential upside of our ongoing transformation," said Ann M. Sardini, Chair of the Board of TreeHouse Foods, in a press release.
Investindustrial, a firm with a long history of investing in the food and beverage sector, sees significant value in TreeHouse's market position. The acquisition is expected to accelerate the food manufacturer's strategic growth and operational improvement initiatives. For TreeHouse, the move to go private will allow management to focus on long-term transformation without the pressures of quarterly public market scrutiny. Analysts suggest the deal provides a firm valuation floor for a company that has been perceived as undervalued.
Based in Oak Brook, Illinois, TreeHouse Foods is a major player in the private-label food and beverage industry, supplying a wide range of products to retailers and foodservice operators. The company's stock had experienced a challenging year, trading significantly below its 52-week high of $40.77. The $22.50 per share offer, while a significant premium to recent levels, remains below the average analyst target price of $21.06 prior to the deal's announcement.
The transaction is not subject to a financing condition and is expected to close in the first half of 2026, pending approval by TreeHouse Foods shareholders and the satisfaction of customary closing conditions, including regulatory approvals. Upon completion of the deal, TreeHouse Foods will become a privately held company, and its shares will no longer be listed on the New York Stock Exchange. The move follows a trend of private equity firms targeting publicly traded consumer goods companies they believe have potential for operational turnarounds and growth away from the public eye.