Del Monte Pacific reaches agreement with Big Heart Pet Brands
Del Monte Pacific Ltd. today said it has reached a $38-million settlement agreement with Big Heart Pet Brands, the company said in a disclosure to the stock exchange.
Del Monte Pacific’s subsidiary, Del Monte Foods Inc., bought Big Heart Pet Brands’ consumer food business in 2013.
The deal, which was consummated in 2014, recognized that there would be adjustments based on the actual working capital level on the day they close the deal.
Del Monte Foods and Big Heart Pet Brands disagreed on the adjustment at the time.
The purchase price was raised to make up for the difference between the target working capital and Big Heart Pet Brands’ estimate of working capital on the day immediately preceding the closing date.
Big Heart Pet Brands wanted a bigger adjustment while Del Monte Pacific insisted that the price was not in accordance with the purchase agreement and that it was Big Heart Pet Brands that needed to fork over money because it paid too much.
The matter was given to an independent certified public accounting firm for resolution.
The two parties continued discussions until they reached the agreement on the amount of the refund that Del Monte Foods was entitled from Big Heart Pet Brands. (By: Eileen A. Mencias)