Flagstone Foods' rapidly growing trail mix and dried fruit snack business hooked Illinois-based TreeHouse Foods, which is now acquiring the St. Paul company for $860 million in cash.
Flagstone reported $697 million in sales last year, and has been growing about 24 percent a year.
It has about 1,365 employees, including several hundred who work at a facility in Minneapolis. And it had about 45 employees at its corporate headquarters as of 2012.
Its management team, including CEO Paul Lapadat, is expected to continue on after the transaction is complete, TreeHouse said.
"Paul has done an outstanding job executing upon a clear strategic vision and building a strong culture that we believe will be an excellent fit with the TreeHouse family," Sam Reed, TreeHouse's chief executive, said in a statement.
A spokesman for TreeHouse Foods said its executives, as well as Lapadat, were not available for comment. He also couldn't confirm whether Flagstone will keep its headquarters in St. Paul or how many employees currently work in that office.
TreeHouse executives said Flagstone, an industry leader in private-label trail mix and dried fruit, will be the foundation of its growth platform. They noted that it operates in one of the fastest-growing categories in the food industry. On top of that, they said Flagstone has shown strong results from its partnership with grocery stores to prominently display its products along the perimeters of stores where customer traffic has been growing.
"Flagstone provides us with a private-label portal from center-of-store staples to perimeter-based healthy snacks," Reed said. "This portal leads to a private-label bridge, linking product category mainstays of the baby boomer generation to the health, wellness and convenience preferences of millennial customers."
This is TreeHouse's largest acquisition. The transaction is expected to close during the third quarter and is expected to be financed through borrowings under TreeHouse's existing credit facility and a $325 million equity issuance.
TreeHouse Foods, which is based in the Chicago suburb of Oak Brook, is a food manufacturer whose major product lines include non-dairy powdered creamer, canned soup, pickles, salad dressings, powdered drink mixes, instant oatmeal, salsa and jams.
Flagstone Foods was formed in November 2010 out of two companies acquired by San Francisco-based private equity firm Gryphon Investors. Those companies are Minneapolis-based American Importing Co., which specializes in dried fruit, and Maryland-based Ann's House of Nuts.
A couple of years ago, St. Paul gave Flagstone an $80,000 loan to help it move into offices in the Lawson Commons building.
"I'm very proud of what we have built to date at Flagstone Foods, and I believe that we are just getting started," Lapadat said in a statement.