Diego Thomazini/iStock via Getty Images

Diego Thomazini/iStock via Getty Images

TreeHouse Foods (NYSE:THS ) announced that it has reached a definitive agreement to sell a significant portion of its Meal Preparation business to Investindustrial for $950M.

The categories to be divested include the following: pasta, pourable and spoonable dressing, preserves, red sauces, syrup, dry blends and baking, dry dinners, pie filling, pita chips and other sauces.

The $950M transaction value represents approximately 13.6X times estimated 2022 EBITDA for the divested business. The transaction consists of approximately $530M in cash at closing and approximately $420M in senior secured debt to be provided by TreeHouse.

The divested business is expected to generate 2022 sales of $1.6B and adjusted EBITDA of $70M.

The food company said the transaction enables it to simplify its business and will help improve operational execution. THS also expects to further enhance its ability to accelerate growth through category depth in the higher growth and margin Snacking and Beverages business.