Birds Eye Foods, the nation's largest frozen food company, which got its start in Gloucester, is being bought for $1.3 billion by the packaged foods company Pinnacle Foods Group, based in Mountain Lakes, N.J.
As a result of the deal, a planned public offering of Birds Eye Foods stock will be withdrawn.
Pinnacle, owned by investment company Blackstone Group, said the purchase will strengthen its financial position and array of food products. The company is one of the largest packaged food companies with products such as Duncan Hines, Swanson frozen dinners, Vlasic pickles and Mrs. Butterworth's syrup.
Birds Eye, which is now based in Rochester N.Y., sells its namesake frozen vegetables as well as products like Tim's Cascade Snacks and Nalley Chili.
The company was founded by Clarence Birdseye, who perfected the flash-freezing process when he moved his General Seafood Corp. to a factory off Pavillion Beach in Gloucester in 1925. Here on Cape Ann, it employed Birdseye's newest invention, the double belt freezer, in which cold brine chilled a pair of stainless steel belts carrying packaged fish, freezing the fish quickly. His invention subsequently issued as US Patent 1,773,079, marked the beginning of today's frozen foods industry. Birdseye then took out patents on machinery which cooled more quickly so that only small ice crystals can form and cell walls are not damaged. In 1927 he began to extend the process to quick-freezing of meat, poultry, fruit, and vegetables.
In 1929, Birdseye sold his company and patents for $22 million to Goldman Sachs and the Postum Co, which eventually became General Foods Corp, and which founded the Birds Eye Frozen Food Co. Birdseye continued to work with the company, developing frozen food technology. In 1930 the company began sales experiments in 18 retail stores around Springfield to test consumer acceptance of quick-frozen foods. The initial product line featured 26 items, including 18 cuts of frozen meat, spinach and peas, a variety of fruits and berries, blue point oysters, and fish fillets. Consumer acceptance was strong, and today this experiment is considered the birth of retail frozen foods. The "Birds Eye" name remains a leading frozen-food brand.
The company is owned by a holding company that is controlled by Vestar Capital Partners, Pro-Fac Cooperative and Birds Eye management.
Pinnacle said it expects to fund the transaction using a combination of new-debt financing at the company and a "significant new equity contribution" from Blackstone.
The transaction is expected to close no later than the first quarter of 2010.
Material from the Associated Press was used in this report.
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