UPDATE 1-TreeHouse Foods to sell part of meal prep business for $950 million

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(Adds background, details on deal)

Aug 11 (Reuters) - TreeHouse Foods Inc said on Thursday it would sell a significant portion of its meal preparation business to an investment firm for $950 million in a bid to focus more on its private-label snacking and beverage portfolio.

The to-be divested business, which makes pasta, preserves, red sauces and syrup for store-owned brands, is expected to bring in roughly $1.6 billion in net sales and $70 million in adjusted core earnings for 2022, the food distributor said.

U.S. packaged food makers including Kellogg Co and Mondelez International Inc have been doubling down on their snacking businesses which offer better growth and margins, as Americans stick to snacking habits from the lockdown era.

Surging inflation has also driven up demand for private-label foods as cash-strapped consumers shun expensive national brands in favor of cheaper store-owned labels.

"The positive demand trends for private label are clear and simplifying our business will position us to better capitalize on those trends," TreeHouse Chief Executive Officer Steve Oakland said in a statement.

The buyer, Investindustrial VII LP, already has a portfolio company that makes private-label foods including preserved vegetables and fruit juices for the European market.

(Reporting by Praveen Paramasivam in Bengaluru; Editing by Shounak Dasgupta and Devika Syamnath)