The transaction is expected to close by the first quarter of next year, Pinnacle said in a statement.
The deal is seen as the latest sign of a thawing in private equity deal flow, which has been constrained for over a year by the financial turmoil.
Blackstone has stepped up deal activity in the past few months, including buying Anheuser-Busch InBev’s U.S. theme parks for up to $2.7 billion.
Blackstone is buying Birds Eye, which has long-term debt of about $700 million, through portfolio company Pinnacle, which makes packaged foods such as Hungry-Man frozen dinners, the companies announced in a press release. Blackstone bought Pinnacle in 2007 for $2.16 billion.
The private equity firm is investing $300 million of equity in Pinnacle to fund the transaction, a source familiar with the situation said.
It is a different track for Birds Eye, which had previously filed for an IPO to raise up to $350 million.
Birds Eye, known for its branded frozen vegetables and frozen meals, is majority owned by
The Rochester, New York-based frozen foods company said in the filing it held the top position in the frozen vegetables market with sales of $935.6 million in the fiscal year ended in June 2009.
Pinnacle Foods was advised by Blackstone, Barclays Capital, BofA Merrill Lynch and Credit Suisse (CSGN.VX). Birds Eye was advised by Centerview Partners and JPMorgan. —Megan Davies, Reuters