Conagra Brands Considers Selling Chef Boyardee

By Abigail Summerville
NEW YORK (Reuters) – Conagra Brands (NYSE:CAG), the maker of Slim Jim beef jerky and Healthy Choice frozen meals, is looking to sell its popular canned pasta brand Chef Boyardee, according to people familiar with the matter.

The Chicago, Illinois-based packaged food company has tapped investment bank Centerview Partners to gauge interest in the business, which could be valued at well over $500 million, the sources said, requesting anonymity as the discussions are confidential.

Potential buyers for Chef Boyardee, named after Italian-American chef Hector Boiardi, include other packaged food companies and private equity firms, the sources noted.

This move comes as Conagra is grappling with a slowdown in sales and attempting to weather the impact of price inflation that has forced consumers to cut back on grocery spending. Conagra's shares have fallen about 16% in the past three months, giving the company a market value of $13 billion.

Besides Chef Boyardee, Conagra also owns brands like Orville Redenbacher's popcorn, Hunt's ketchup, and Birds Eye frozen meals. The company has recently launched new products, rolled out more discounts, and slowed down price increases to attract customers.

As it focuses on launching new products, Conagra is exploring divesting parts of its packaged foods portfolio seen as non-core. During its most recent post-earnings call, Chief Executive Sean Connolly indicated the company would look to divest "low-growth businesses," without specifying which brands might be considered.

Chef Boyardee was launched in 1928 by chef Hector Boiardi and his brothers, who used a phonetic spelling for the brand to ensure correct pronunciation by Americans. Conagra acquired Chef Boyardee in 2000 through its $2.9 billion deal for International Home Foods.

For the 12-month period ending May 26, the segment’s net sales declined 3.1% from the previous year, primarily due to inflation impact.