Bulletin: Conagra Brands' Fiscal Third Quarter Results Have Somewhat Alleviated Investor Concerns Over Its Acquisition Of Pinnacle

CHICAGO (S&P Global Ratings) March 22, 2019--Conagra Brands Inc. (BBB-/Stable/A-3) reported results for the third quarter of fiscal year 2019 that somewhat alleviated investor concerns about its recently closed acquisition of Pinnacle Foods. Specifically, the company's legacy business improved, and it did not report any new negative information about the Pinnacle acquisition. This follows the company's results for its fiscal second quarter, which--in our view--demonstrated that its Oct. 26, 2018, acquisition of Pinnacle was underwritten using low-quality sales and EBITDA assumptions. Improving Pinnacle's profitability closer to pre-acquisition levels, mainly through product innovation and better pricing discipline, will probably take over a year. During the third quarter, Conagra made progress toward reducing its debt (estimated S&P adjusted leverage of close to

...CHICAGO (S&P Global Ratings) March 22, 2019--Conagra Brands Inc. (###-/Stable/A-3) reported results for the third quarter of fiscal year 2019 that somewhat alleviated investor concerns about its recently closed acquisition of Pinnacle Foods. Specifically, the company's legacy business improved, and it did not report any new negative information about the Pinnacle acquisition. This follows the company's results for its fiscal second quarter, which--in our view--demonstrated that its Oct. 26, 2018, acquisition of Pinnacle was underwritten using low-quality sales and EBITDA assumptions. Improving Pinnacle's profitability closer to pre-acquisition levels, mainly through product innovation and better pricing discipline, will probably take over a year. During the third quarter, Conagra made progress toward reducing its debt (estimated S&P adjusted leverage of close to 5x), though we expect the company to endure at least several more quarters of weak results from Pinnacle. In our view, this will...

Bulletin