Acquisition of Bob Evans Farms expected to close on Jan. 12, new leadership appointments to follow
Post Holdings Inc., a CPG holding company, plans to explore a range of strategic alternatives for its private brands businesses, which produce nut butter, dried fruit and nut, pasta and granola products for retailers, distributors and manufacturers.
Post also expects to close the acquisition of Bob Evans Farms Inc. today.
A new private brands business
Post intends to combine its private brands businesses under the leadership of Jim Dwyer, current president and CEO of Post’s Michael Foods Group. Post plans to explore a range of structural alternatives for its private brands businesses, including an initial public offering, a placement of private equity, a sale of the businesses or a strategic combination.
“We believe Jim Dwyer’s leadership will drive value creation in our strategic private brands businesses,” said Rob Vitale, Post’s president and CEO. “We further believe the best structure to support Jim and his team is likely outside of Post’s full ownership, and we will aggressively explore creative alternatives involving direct capital and/or strategic partnerships.”
“Private brands will continue to be a strong growth driver across all trade channels and customers,” said Jim Dwyer. “It’s exciting to create a business singularly focused on partnering with customers to profitably grow our respective businesses.”
Post expects to report the private brands businesses (inclusive of Golden Boy, Dakota Growers and Attune Foods) as one segment beginning in the second quarter of fiscal year 2018. These businesses, for the fiscal year ended Sept. 30, 2017, reported net sales of $791.2 million, net earnings of $43.4 million and Adjusted EBITDA of $106.9 million. This financial information does not include standalone costs and corporate cost allocations, including interest expense allocations. Net earnings, interest expense and income tax expense on a standalone basis may differ materially from this presentation.
Post has not set a timetable for its exploration process and says it does not intend to comment on or provide updates on these matters “unless and until it determines that further disclosure is appropriate or required based on the then-current facts and circumstances.”
Closing of the acquisition of Bob Evans Farms
At the special meeting of stockholders of Bob Evans, held on Jan. 9, the stockholders approved the acquisition of Bob Evans by Post, satisfying one of the closing conditions of the transaction. Post anticipates closing the acquisition today, subject to the satisfaction of remaining limited closing conditions.
Upon close of the acquisition of Bob Evans, Post will form a refrigerated retail business unit and a foodservice business unit. As previously announced, Mike Townsley, current CEO of Bob Evans, will lead the refrigerated retail business, inclusive of Bob Evans’ retail business and Michael Foods’ retail egg, potato and cheese business. Mark Westphal, current CFO of Post’s Michael Foods Group, has been named president of Michael Foods and will lead the foodservice business, inclusive of Michael Foods foodservice egg and potato business and Bob Evans foodservice business.
Post Holdings, headquartered in St. Louis, Missouri, operates in the center-of-the-store, foodservice, food ingredient, private label, refrigerated and active nutrition food categories. Its portfolio of brands includes Honey Bunches of Oats, Pebbles, Great Grains and Malt-O-Meal bag cereal, as well as granola and hot wheat products. Post’s Michael Foods Group supplies value-added egg products, refrigerated potato products, cheese and other dairy case products and dry pasta products to the foodservice, food ingredient and private label retail channels and markets retail brands including All Whites, Better’n Eggs, Simply Potatoes and Crystal Farms. Post’s Active Nutrition platform includes brands such as Premier Protein, PowerBar and Dymatize.