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Amid its declining stock price, weak valuation and an uptick in private label food M&A, TreeHouse Foods [NYSE:THS] could draw interest from potential buyers, said four sector advisors.

At least financial sponsors have been “sniffing around” the private label food company for several months, these sector advisors said. They said they were not aware of TreeHouse running an active sale process.

The Oak Brook, Illinois-based company, which trades at a low EBITDA valuation versus its food peers, shows up on private equity screens, one of the sector advisors said. Strategics may also have an appetite for the company, said this sector advisor and a second sector advisor.

TreeHouse currently trades at 7.5x EV/adjusted TTM EBITDA. The company is scheduled to announce its 4Q17 earnings results on 15 February.

Some of its peers like B&G Foods [NYSE:BGS] trade at 12.3x adjusted TTM EBITDA and Post Holdings [NYSE:POST] at 10.2x adjusted TTM EBITDA. In early January, Post announced it was reviewing strategic alternatives for its private brands business, which produces nut butter, dried fruit and nuts, pasta and granola products.

There is a good chance Treehouse could pique the interest of activist investors, two the advisors said, which could act as a catalyst for a sale of the company. In 3Q17, investment firm Blue Harbour Group, which typically works behind the scenes in activist campaigns, purchased a 1.5% stake in TreeHouse.

A TreeHouse shareholder agreed and said the company has been a poor performer in the context of a growing end market for private labels. “This has mostly been a margins issue and possibly if not probably poor cost analysis by management of some projects they got into,” he said. The company was a good case “for some external heat to be applied,” he said.

TreeHouse’s stock is down more than 50% from its 52-week high of USD 90.42. In afternoon trading, the company’s share price hovered at USD 43.50. It has USD 2.7bn in debt, with 17% gross profit margins and 10% EBITDA margins.

In August last year the company launched a long-term restructuring plan and in November it announced a USD 400m share buyback.

Last November, the company’s stock plunged to its lowest point in more than six years and new CEO Robert Aiken resigned. TreeHouse is currently searching for a new CEO. In the interim, chairman and former CEO Sam Reed, has taken over Aiken’s role.

The company accounted for the severe stock drop on its 3Q17 earnings call by highlighting the company’s divestiture of its Soup and Infant Feeding (SIP) business in conjunction with “unanticipated volume pressure, increased manufacturing complexity, and retail bid pricing compression in several segments.”

The TreeHouse management team is well-respected and has done a good job growing the business, two of the sector advisors said. But CEO Reed, who is deemed to be the “architect” of TreeHouse, is 70-years-old and it is unclear who will be the next person to lead TreeHouse and grow the company further, one of them said.

The other sector advisor said: “If you are thinking about what parts of food space is going to do well in the next 10-20 years, private labels is one of the good places to be in. It is not going to be super charge business like hot snacks brand but it is a good business.”

Despite its challenges, TreeHouse is considered a highly scalable business with strong brands, and is the largest player in the increasingly attractive private label space, three of the sector advisors said. Private label has been a hot sector overall, agreed a sector advisor, but some sellers of TreeHouse’s goods are moving to their own private labels, with companies like Amazon.com [NASDAQ:AMZN], through Whole Foods [NASDAQ:WFM], Costco [NASDAQ:COST] and Kroger [NYSE:KR] running their own private label brands. That pressure on TreeHouse should abate, however, the advisor added.

Alternatively, financial sponsors could likely target specific, “easily separate-able” assets such as TreeHouse’s healthy snack brand Flagstone Foods, which it acquired for USD 860m in 2014, one of the sector advisors said.

Two of the sector advisors countered that a full sale of TreeHouse is more likely, given that the company is still in the process of integrating private label pasta producer Ralcorp, which would make carve-outs complicated. TreeHouse acquired Ralcorp in 2015 for USD 2.7bn from ConAgra Brands’[NYSE:CAG].

The company could likewise conclude the company is better off pursuing a turnaround as an independent company and not pursue a sale, one of the sector advisors said.

Treehouse declined to comment.