CTI Foods Holding Co.’s owner, private-equity firm Littlejohn & Co., is exploring a sale of the prepared-foods supplier that may fetch about $500 million, two people familiar with the matter said.
Littlejohn is working with Morgan Stanley (MS) on the potential sale of Wilder, Idaho-based CTI, which makes fajita meat, burgers, soups and sauces for restaurants, said the people, who asked not to be named because the discussions are private.
Littlejohn declined to comment on a potential sale or the value of a deal. Akhilesh Raina, a Morgan Stanley spokesman, declined to comment. CTI Chief Executive Officer Bobby Horowitz didn’t return calls and declined to comment through an assistant.
CTI has expanded in the U.S. after Littlejohn, based in Greenwich, Connecticut, recapitalized the company in 2010. Last year, CTI acquired a ground-beef plant in Pennsylvania and bought Custom Food Products LLC to add plants in California and Kentucky, according to the company’s website. CTI also runs facilities in Texas.
CTI generated more than $700 million in sales in the year through Sept. 8, according to a Dec. 14 report from Moody’s Investors Service.
Moody’s in December maintained its rating for CTI at B2, five levels below investment grade, while boosting the outlook to positive from stable partly because CTI’s volumes are rising and the new products and distribution it has gained from recent acquisitions will help it expand on the U.S. East Coast.
U.S. meat processors such as Smithfield Foods Inc. (SFD) and Tyson Foods Inc. (TSN) have made deals to expand their packaged-meat and prepared-foods businesses to smooth out volatility from livestock and feed costs.
In February Smithfield, the world’s largest hog producer, announced a joint venture with Kansas City Sausage Co., and Tyson, the largest U.S. meat processor, said it would buy tortilla maker Don Julio Foods.