US-based food production and distribution company Del Monte is considering the sale of its canned food business as part of the plan to focus on pet food business.
The canned food division manufactures canned vegetables, fruit cups and soup broths and has sales of about $1.8bn annually which represents half of the company's revenues.
The proposed sale is in the advanced stages and the company is gauging interest from potential buyers of the division, reports The Wall Street Journal, citing sources familiar with the matter.
Del Monte has appointed Centerview Partners and Morgan Stanley to assist in the sale of the business, the sources said.
The process would fetch the company about $2bn and will allow it to focus solely on its pet food business which includes brands such as Milk-Bone and Kibbles 'n Bits.
In May this year, Del Monte entered into a merger agreement with Natural Balance Pet Foods, a manufacturer of pet food for dogs and cats sold throughout North America, Europe and Asia. The deal is in line with the company's long-term strategy to further strengthen its pet food and snacks brand portfolio.
For the third quarter of 2013, the company reported net income of $28.3m, while net sales totalled $1.02bn.
In 2011, Del Monte Foods was acquired by an investor group led by funds affiliated with Kohlberg Kravis Roberts, Vestar Capital Partners and Centerview Capital in a deal worth approximately $4bn.
