St. Louis / MO. (pfh) Post Holdings Inc., a consumer packaged goods holding company, announced that it has agreed to acquire the private label ready-to-eat (RTE) cereal business of TreeHouse Foods. The TreeHouse RTE cereal business is a leading private label RTE cereal manufacturer with wide-ranging RTE cereal production capabilities across two facilities, serving a diverse set of customers across retail channels.
The transaction is expected to be completed in the third calendar quarter (Post’s fourth fiscal quarter), subject to customary closing conditions including the expiration of waiting periods under U.S. antitrust laws. Upon closing of the acquisition, Post expects that the TreeHouse RTE cereal business will be included in Post’s existing North American RTE cereal business, Post Consumer Brands.
Post expects to fund the acquisition with cash on hand. Post management anticipates that during the twelve months following the completion of the transaction the TreeHouse RTE cereal business will generate Adjusted Ebitda of USD 15 to USD 20 million, including synergies. Post management further expects to incur USD 25 to USD 30 million in one-time costs.
The transaction is expected to be immediately accretive to Post’s free cash flow, excluding one-time transaction expenses. Additionally, Post expects the transaction to result in a tax benefit to Post with a net present value of approximately USD 14 to USD 16 million.
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