December 5, 2020

DealBook: Hershey C.E.O. Leaves to Run Del Monte

Del Monte

The chief executive of Hershey, David J. West, is leaving the publicly traded chocolate maker to run the privately held Del Monte Foods.

Mr. West, who was named to the top spot at Hershey in 2007, will take on a smaller business in Del Monte. Last year, Hershey reported sales of $5.67 billion and net income of about $510 million. In its last fiscal year, Del Monte generated revenue of $3.7 billion.

Del Monte’s business has also been struggling. Revenue dropped 1.9 percent in the latest quarter for which the company reported financial results. Operating income improved modestly, to $148 million, from $140.6 million in the period a year earlier.

In March, a group of private equity investors including Kohlberg Kravis Roberts, Vestar Capital Partners and Centerview Partners, bought Del Monte for more than $5 billion, including debt. The deal had been previously criticized in court for the cozy relationship between the bankers and the private equity players. A state judge, in an opinion, said Barclays had “secretly and selfishly manipulated the sale process,” with the help of K.K.R.

Current and former executives at public companies have a long history of moving to private equity firms or their portfolio companies, which offer the lure of riches without the demands of shareholders. In 2006, the parent of Nielsen Media research, a Dutch company owned by K.K.R., hired David Calhoun, then a vice chairman at General Electric.

Some executives serially switch between public and private companies. In 1989, K.K.R. tapped Louis V. Gerstner Jr, then a president at American Express, to head up RJR Nabisco, the buyout of which was immortalized in the book “Barbarians at the Gate.”

Four years later, Mr. Gerstner became chairman of the publicly traded IBM. After retiring from the computer maker, he went back into the private equity world, becoming chairman of the Carlyle Group in January 2003. He now serves as a senior adviser to Carlyle.

Hershey announced the departure of Mr. West on Wednesday. The company appointed John P. Bilbrey, currently the chief operating officer, as the interim chief.

“We’re pleased that J.P. has accepted this position,” James E. Nevels, Hershey’s chairman said in a statement. “He has worked closely with the board for several years and has been involved in all aspects of the company’s strategy and operations.”

Article source: http://feeds.nytimes.com/click.phdo?i=27ff87d3734c2493a33e24e4f30645e3

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