Del Monte Foods, one of the country's largest producers, distributors and marketers of branded food and pet products for the U.S. retail market, has agreed to be acquired by an investor group led by private equity firm Kohlberg Kravis Roberts (KKR) for $5.3 billion, including debt.

An investor group comprising of KKR, Vestar Capital Partners and Centerview Partners has offered $19 a share in cash for the San Francisco-based company. The investors also have offered to assume Del Monte's $1.3 billion debt.

The deal, which represents a premium of about 40 percent over Del Monte's average closing share price during the past three months prior to November 18, 2010 when rumors of acquisition surfaced in the market, was announced on Nov. 25.

However, Del Monte reserves the right to solicit alternative proposals through Jan. 8. In the absence of alternative bids, the company said it expects to close the deal by March next year.

Del Monte CEO Richard G. Wolford said the deal delivers substantial shareholder value and is a clear endorsement of Del Monte's strategic success and effective execution.

Simon Brown, head of KKR's North American Consumer Practice, said the premium was justified as Del Monte has a first-rate brand portfolio and excellent reputation for providing high quality and nutritious products to families and their pets. The company's portfolio of brands includes Del Monte, S&W, Contadina, College Inn, Meow Mix, Kibbles 'n Bits, 9Lives, Milk-Bone, Pup-Peroni, Meaty Bone, Snausages and Pounce.

Gibson Dunn & Crutcher and Simpson Thacher & Bartlett served as legal advisers to Del Monte and the investors group respectively.