THE Campos-led Del Monte Pacific Ltd. said its US unit Del Monte Foods Inc. has settled its dispute with a company that it wants to buy.
The company said in its disclosure to the Philippine Stock Exchange, 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 its agreement, Big Heart will pay Del Monte Foods $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 its agreement was subject to an adjustment based on the actual working capital level delivered at closing.
“Accordingly, the purchase price was adjusted upward 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 said.
Big Heart, however, sought an additional upward adjustment to the purchase price based on its calculation of working capital, but Del Monte Foods disagreed.
The Campos company asserted that Big Heart’s calculation was not in accordance 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.