ST. LOUIS — Post Holdings, Inc. has acquired the ready-to-eat cereal business of Oak Brook, Ill.-based TreeHouse Foods, Inc. for $85 million. The acquisition includes two facilities located in Lancaster, Ohio, and Sparks, Nev., which feature a wide range of production capabilities across batch and extruded products, a research and development facility located in Sauget, Ill., as well as inventory valued at approximately $30 million.
Post first announced its intent to acquire the private label RTE cereal business of TreeHouse Foods in May 2019, but the deal was terminated on Jan. 13, 2020, a decision that came a little less than a month after the Federal Trade Commission filed an administrative complaint challenging the companies’ proposed $110 million transaction. At the time, Steven T. Oakland, president and chief executive officer of TreeHouse Foods, said the business risk, necessary resources and extent of time required to challenge the FTC’s position “was not in the best interest of our constituencies.”
Following the completed deal on June 1, Mr. Oakland called the transaction “another important step in our strategic journey to create value for our customers and our shareholders.”
“Based on our thorough efforts to find alternative buyers for the business, we believe this transaction is not only in the best interest of its employees and customers, but also gives the business the opportunity to flourish as part of Post,” he said. “I want to express my gratitude to the approximately 500 RTE team members for their ongoing commitment, as we work closely with Post to facilitate a smooth transition for all stakeholders.”
TreeHouse Foods acquired the RTE cereal business from Conagra Brands as part of the Private Brands transaction in 2016.
The financial results of the acquired RTE cereal business are expected to be reported in the Post Consumer Brands segment and are expected to be modestly dilutive to Post’s adjusted EBITDA for fiscal year 2021 and accretive in fiscal year 2022.