On June 27, 2018, Conagra Brands (CAG) acquired Pinnacle Foods (PF) as part of an $8.1 billion cash-and-stock deal. With assumed debt, the deal is valued at a total of $10.9 billion.
More than a year earlier, Conagra had approached Pinnacle about a possible acquisition. At that time, the discussion of an acquisition sent Pinnacle’s stock soaring, but the two corporations were unable to come to an agreement. Though Conagra and Pinnacle did not reach a deal, Pinnacle’s stock continued to climb through the summer of 2017 as acquisition rumors swirled — rumors about Conagra (or perhaps a different company) buying Pinnacle.
Conagra’s unsuccessful bid put Pinnacle in play. Then, in April 2018, activist investment firm JANA Partners acquired a 9.1% stake in Pinnacle, which it used to push for restructuring and a potential divestiture. Almost a year after Conagra and Pinnacle’s initial discussions about an acquisition, the sale of Pinnacle looked likelier than ever.
Any investor tracking a Pinnacle acquisition would have been on high alert. Headlines in Summer 2017 and into Spring 2018 may have indicated a Pinnacle purchase, but an investor using JetTrack would have been able to get further conviction by monitoring the jets of Pinnacle or any potential suitor.
A Packaged Food Industry Under Pressure Made the Deal Likely
Conagra Brands, founded in 1919, is located in the heart of Chicago, IL. It owns a range of well-known consumer food brands, including Reddi-wip, Healthy Choice, Slim Jim, Hunt’s, Chef Boyardee, Hebrew National, David Sunflower Seeds and more.
Pinnacle Foods was founded in 1998 as Vlasic Foods International. Its headquarters are located in Parsippany, NJ, and it owns popular brands like Birds Eye, Hungry-Man, Mrs. Paul’s, Smart Balance, Duncan Hines, Mrs. Butterworth’s and others.
Conagra announced a new CEO in 2015 — Sean Connolly, who had previously served as CEO of Hillshire Brands. In 2014, Hillshire came close to acquiring Pinnacle, though the company ended up merging with Tyson Foods instead. That previous interaction signaled potential renewed interest once Connolly joined Conagra.
Pinnacle enjoyed a strong end to 2017 after the acquisition overture from Conagra. In 2017’s fourth quarter, Pinnacle posted its 15th consecutive quarter and 6th consecutive year of market growth. Still, the margins in the packaged food industry have been under pressure in recent years, mostly due to shifts in supermarket pricing and the presence of discount retailers like Wal-Mart and Target.
Because of its strong end to 2017, and because of shrinking margins in its industry, Pinnacle Foods looked like a perfect acquisition target — and JANA Partners began using its stake to rekindle conversations with Conagra.
Conagra Sends Two Jets to Visit Pinnacle
JetTrack’s database includes four jets owned by Conagra (see photo below). An investor tracking these jets as the likelihood of a Pinnacle acquisition increased would have noticed interesting activity on June 12, 2018.
On that date, 2 Conagra aircraft traveled from the Chicago area to Morristown, NJ, which is about a 10-minute drive from Pinnacle’s headquarters (see photo below):
Aircraft #201: Chicago/Prospect Heights/Wheeling, IL to Morristown, NJ (arrive 1:59 p.m. and stay 5 hours)
Aircraft #224: Chicago/Prospect Heights/Wheeling, IL to Morristown, NJ (arrive 2:08 p.m. and stay 5 hours)
Both aircraft reached the same destination at roughly the same time, and each stayed at that destination for 5 hours. Most interesting, though, is that Conagra took two jets in the first place.
Both Conagra’s Aircraft #201 and Aircraft #224 are LearJet 45s, which can accommodate up to 9 passengers. Bringing two jets signals a full deal team for negotiations.
Just 2 weeks later, Conagra’s acquisition of Pinnacle was announced. With the acquisition, Conagra becomes the nation’s second-largest frozen food company behind only Nestle.
JetTrack Offers Valuable Signals as Mergers and Acquisitions Develop
JetTrack offers a range of valuable insights to investors who are searching for signals of emerging mergers and acquisitions, or even to investors who want confirmation for existing signals.
JetTrack’s database includes thousands of aircraft owned and/or operated by publicly traded companies. Using JetTrack, investors and investment firms can see where a company’s aircraft are going, as well as how often they visit specific destinations.
The case study outlined above shows that when a company sends two jets on the same trip at the same time, it may signal a larger-than-usual contingent that suggests talks with a company are intensifying. See other case studies to read more about how JetTrack’s database can be used by investors and investment firms.
Interested in taking a closer look at JetTrack? Get in touch to learn more.