Del Monte gets $38M refund from Big Heart

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Campos-led Del Monte Pacific Ltd. on Monday said its US unit Del Monte Foods Inc. has finally reached an agreement with Big Heart, a consumer firm it is buying out.

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In a disclosure to the Philippine Stock Exchange, the company said its unit Del Monte Foods resolved its dispute with Big Heart Pet Brands, a company formerly known as Del Monte Corp.

Del Monte Foods is acquiring the consumer products business of Big Heart.
Under the agreement, Big Heart will pay Del Monte Foods some $38 million for the acquisition.

The agreement was first signed on October 9, 2013 and was consummated months later on February 18, 2014.

Del Monte said the agreement was subject to an adjustment based on the actual working capital level.

“Accordingly, the purchase price was adjusted upwards based on the difference between the target working capital agreed by the parties and Big Heart’s estimate of working capital on the day immediately preceding the closing date,” Del Monte told the exchange.

Big Heart, however, demanded an additional upward adjustment to the purchase price based on its calculation of working capital, to which Del Monte Foods disagreed.
Del Monte Foods emphasized that Big Heart’s calculation was not in line with the purchase agreement.

“The parties submitted the dispute to an independent certified public accounting firm for resolution. The parties continued discussions until recently when they reached an agreement on the appropriate amount to be refunded to Del Monte Foods,” it said.

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