TreeHouse Foods Stock Slips As Snack Maker Closes Acquisition Of Harris Tea, Reiterates Guidance: Retail’s Waiting and Watching

TreeHouse Foods ($THS) stock closed down 0.8% on Thursday as the beverage and snack maker closed the acquisition of Harris Tea for about $205 million, but retail reaction on Stocktwits was muted.

TreeHouse funded the acquisition with cash-on-hand and expects the acquisition to be accretive to revenue and profitability in 2025. The acquisition includes Harris Tea's manufacturing facilities in Moorestown, N.J. and Marietta, Ga, and also 300 of Harris Tea employees.

TreeHouse Foods has reiterated its 2024 full-year guidance, including the expectation of sequential improvement in volume growth and profit margin in the fourth quarter.

The purchase price was roughly 8.5 times its trailing-12-month adjusted earnings before interest, taxes, depreciation and amortization (Ebitda), or 6.5 times net of synergies and the net present value of future tax benefits, the company said in a statement.

Retail sentiment on Stocktwits was muted following the announcement.

"The acquisition of Harris Tea is a good use of our balance sheet strength, bringing a fast-growing, margin-accretive business into TreeHouse Foods, and giving us an immediate leadership position in private label tea," TreeHouse Foods President and CEO Steve Oakland, said in a statement. "Harris Tea's capabilities in tea sourcing, blending and packing, as well as its scale, industry expertise, and customer relationships, fit our strategy well."

According to Stocktwits data, Wall Street expects the company to post earnings per share of $0.97 for its fourth quarter on estimated revenue of $907.71 million.

TreeHouse stock is down 1.36% year-to-date.

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