Post Holdings to acquire MOM Brands in $1.15 billion deal

January 26, 2015, 12:38 PM UTC
Post Honey Bunches of Oats with Cinnamon Clusters gives you
Post Honey Bunches of Oats with Cinnamon Clusters gives you a spicy sweet start to your day. (Photo by Bob Fila/Chicago Tribune/MCT via Getty Images)
Photograph by Bob Fila — Chicago Tribune/MCT via Getty Images

Cereal maker Post Holdings Inc said it would acquire privately held rival MOM Brands Co for about $1.15 billion in cash and stock to expand in the bagged and hot cereal categories.

Post, the maker of Raisin Bran and Honey Bunches of Oats, will pay $1.05 billion in cash and issue 2.5 million shares to the owners of MOM Brands.

MOM Brands’ ready-to-eat food and cereal brands include Malt-O-Meal, Frosted Mini Spooners, Golden Puffs, Cinnamon Toasters, Fruity Dyno-Bites, Better Oats, and Three Sisters.

Post has been aggressively pursuing deals since it was spun off from Ralcorp Holdings in 2012. The cereal maker said in April that it would buy egg and dairy producer and distributor Michael Foods Inc for $2.45 billion.

Post said on Monday that Richard Koulouris, former president of Ralcorp’s food group, would lead the combined cereal business of MOM Brands and Post. He will join Post on Feb. 9.

ConAgra Foods Inc acquired Ralcorp in January 2013.

Post also estimated net sales of about $1.07 billion and adjusted earnings before interest, taxes, depreciation, and amortization of about $126 million-$128 million for the first quarter ended Dec. 31.

Analysts on average were expecting net sales of $1.07 billion, according to Thomson Reuters I/B/E/S.

Barclays and Credit Suisse are Post’s financial advisers for the deal and Lewis, Rice & Fingersh LC is its legal adviser.

BofA Merrill Lynch is MOM Brands’ financial adviser and Faegre Baker Daniels LLP is its legal adviser.

Post’s shares closed at $41.44 on the New York Stock Exchange on Friday.

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