March 28 (Bloomberg) -- Pinnacle Foods Inc., the Blackstone Group LP-owned maker of Hungry-Man dinners and Duncan Hines cake mixes, jumped in New York after raising $580 million in its initial public offering, which priced at the top end of the proposed range.
The stock rose 11 percent to $22.21 at the close. The Parsippany, New Jersey-based company yesterday sold 29 million shares, equivalent to a 26 percent stake, for $20 each, after offering them for $18 to $20. The shares are listed on the New York Stock Exchange under the symbol PF.
Pinnacle, led by Chief Executive Officer Robert Gamgort, proceeded with its IPO after delaying it last year because of slumping consumer sentiment, people familiar with the situation said at the time. Blackstone bought Pinnacle for $2.2 billion about six years ago, and combined the company with Birds Eye Foods Inc. in a $1.3 billion acquisition in 2009.
“The food industry since the recession has been challenged on the top line because of the pressure on the consumer,” Gamgort said in an interview today with Bloomberg Television. Pinnacle is “a business that can build great value in a low-growth environment.”
Pinnacle generated about $2.5 billion in sales last year. At the IPO price, the company has a market value of about $2.26 billion.
The company’s first priority for excess cash is to protect its dividend, Gamgort said. Pinnacle also is open to acquisitions and has options for funding a deal, he said, without specifying potential targets.
Blackstone didn’t plan to offer shares in the sale, regulatory filings show. Barclays Plc and Bank of America Corp. led the IPO.
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