Del Monte to Buy Meow Mix

Del Monte Foods Co. on Thursday said it would buy cat food maker Meow Mix Holdings Inc. for $705 million and sell its private-label soup and baby food business to focus on its higher-margin branded businesses.

The San Francisco-based company also announced quarterly profit that beat analyst estimates.

Del Monte -- whose pet food brands include 9Lives, Snausages and Kibbles ‘n Bits -- will acquire Meow Mix from New York-based private equity firm Cypress Group.

The acquisition adds heft to Del Monte’s pet food business, which could help it compete with larger companies such as Nestle and Mars Inc.

Del Monte said it expected to get about $23 million in tax benefits from the deal.

At the same time, the company said it would sell its soup and Nature’s Goodness baby food business for $268 million to TreeHouse Foods Inc., a pickle and nondairy creamer company.

Del Monte posted profit of $51.9 million, or 26 cents a share, in the third quarter ended Jan. 29, compared with $48.5 million, or 23 cents, a year earlier.

Analysts on average forecast 21 cents a share, according to Reuters Estimates.

Sales rose 2% to $878.5 million.

Del Monte shares rose 4 cents to $10.94.