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Blackstone Buys Pinnacle Foods for $1.3 Billion

Pinnacle Foods Group, the privately-held owner of Duncan Hines baking mixes, Hungry Man and Swanson frozen dinners and Vlasic pickles, has agreed to be acquired by a group led by the buyout specialist Blackstone Group for about $1.3 billion in cash.

Former Kraft Foods Chief Executive Roger Deromedi will become chairman when the deal closes, the companies said in announcing the deal today.

In addition to the cash payment, the buyers will assume about $900 million in debt, Pinnacle spokesman Roy Winnick said.

Under the deal, a Blackstone affiliate is expected to combine with Pinnacle's direct owner, Crunch Holding.

Pinnacle employs more than 3,000 workers, owns seven manufacturing facilities in the United States, and generates approximately $2.1 billion in annual gross sales.

The Vlasic business, which had included Swanson, was spun off by Campbell Soup of Camden, N.J., in 1998.

Pinnacle brands now also include Celeste pizza, Van de Kamp's and Mrs. Paul's seafood, Log Cabin and Mrs. Buttersworth's syrups, Armour canned meat, Lender's bagels and Aunt Jemima breakfast foods.

The deal is the second acquisition for New York-based Blackstone in less than a week. On Friday, Blackstone completed its $23 billion purchase of Chicago-based Equity Office Properties Trust. Blackstone prevailed with an offer of $55.50 a share after Vornado Realty Trust, of Paramus, N.J., withdrew its bid of $56 a share.

Pinnacle is jointly owned by affiliates of J.P. Morgan Partners (now known as CCMP Capital Advisors), J.W. Childs Associates, L.P., CDM Group and by former bondholders of Aurora Foods.

CDM Group is an investment company controlled by Pinnacle Foods Executive Chairman C. Dean Metropoulos.

Metropoulos assembled the investor group that acquired Aurora Foods out of bankruptcy in March 2004 and combined it with Pinnacle Foods. Pinnacle acquired Armour in March 2006 from Dial, Pinnacle said.

The boards of Pinnacle, Crunch and Crunch Equity Holding have approved the transaction.

The acquisition is expected to close in the first half of the year, subject to customary closing conditions.