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Post plans to explore strategic alternatives for private brands businesses

Published 12 January 2018

Consumer packaged goods holding company Post has unveiled plans to explore 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 announced it expects to close the acquisition of Bob Evans Farms, Inc. (“Bob Evans”) on January 12, 2018. 

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.

Post president and CEO Rob Vitale said: “We believe Jim Dwyer’s leadership will drive value creation in our strategic private brands businesses.

“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.”

Dwyer said: “Private brands will continue to be a strong growth driver across all trade channels and customers.

“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 September 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. Adjusted EBITDA is a non-GAAP measure.

For additional information regarding non-GAAP measures, see the related explanations presented under “Use of Non-GAAP Measure” and “Explanation and Reconciliation of Non-GAAP Measure” later in this release.

There can be no assurance that Post’s exploration of strategic alternatives will result in any transaction or other action by Post. Post has not set a timetable for its exploration process and Post does not intend to comment on or provide updates regarding these matters unless and until it determines that further disclosure is appropriate or required based on the then-current facts and circumstances.

This release does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful.

Closing of the Acquisition of Bob Evans Farms

At the special meeting of stockholders of Bob Evans, held on January 9, 2018, the stockholders approved the acquisition of Bob Evans by Post, satisfying one of the closing conditions of the transaction. Post anticipates closing the acquisition on January 12, 2018, 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.

Source: Company Press Release