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TreeHouse to buy private-label beverage, cereal processor

Toronto-based food, powdered beverage and tea processor Associated Brands is poised to join jam maker E.D. Smith in the Canadian branches of TreeHouse Foods.

Chicago-based TreeHouse announced Thursday it will pay $187 million for Associated, whose owners include Canadian private equity firm TorQuest Partners and “other shareholders.”

Associated is well known as a private-label maker of powdered drinks, specialty teas and sweeteners, as well as instant oatmeal, hot chocolate drinks, dessert mixes, soups, bouillon, side dishes and assorted “nutritional and weight management products.”

The deal is expected to close in TreeHouse’s third fiscal quarter this year.

Associated Brands, majority-owned by TorQuest since 2007, “has a strong North American presence in a number of dry mix categories that are complementary to TreeHouse,” TreeHouse CEO Sam Reed said in a release.

Further, Reed said, “through Associated Brands, we will also enter the large and growing specialty tea category. Not only is tea recognized for its nutritional and health benefits, but it will also be a wonderful complement to our rapidly growing single serve coffee platform.”

Associated, whose main plant is at Medina, N.Y., about 70 km east of Niagara Falls, supplies nearly all of the 50 largest North American food retailers.

Associated became a player in the tea business in May last year when it merged with Vancouver-based North American Tea and Coffee under the Associated banner. NATC brought its plants in Toronto and Delta, B.C. into the marriage.

Associated also owned a manufacturing plant in Winnipeg making products such as puffed wheat cereal and other puffed grains, but closed that operation last year and sold the property in December.

TreeHouse’s holdings include Ontario-based jam, spread and pie filling maker E.D. Smith as well as private-label U.S. processor Bay Valley Foods, Wisconsin-based Sturm Foods and U.S. pasta maker S.T. Specialty Foods.

TreeHouse bills itself as one of the biggest pickle packers and makers of non-dairy powdered creamer in the U.S., as well the biggest maker of private-label salad dressings, powdered drink mixes and instant hot cereals in the U.S. and Canada based on sales volumes.

“We see significant opportunities to expand Associated Brands’ sales, while leveraging their strong customer relationships in both retail and industrial channels,” Reed said Thursday.

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