ST. LOUIS — Post Holdings, Inc. said it plans to consolidate its Post Foods and MOM Brands cereal businesses into one group, to be called Post Consumer Brands. The business will be headquartered in Lakeville, Minn., at MOM Brands’ existing facilities. As a result, Post expects to close its office in Parsippany, N.J.
Post said it expects to close the Parsippany office by May 2016, a move that will affect approximately 200 employees.
Chris Neugent, president of MOM Brands, will lead Post Consumer Brands. Mr. Neugent will report to Rich Koulouris, who joined Post Holdings in February to lead Post Foods Group, comprising branded center-of-the-store (Post Consumer Brands) as well as its private label retail businesses.
“Combining our businesses in Lakeville will create a powerful branded platform for both branded cereal and further acquisitions,” said Rob Vitale, president and chief executive officer of Post Holdings. “While I am delighted that Chris and his colleagues are joining Post, we are acutely aware of the contributions made by employees negatively impacted by this decision, and we are committed to helping them through this transition.”
In connection with the decisions, Post expects to incur pre-tax expenses of $27 million to $30 million for employee severance, retention and relocation payments. Approximately half of the charges are expected to be incurred in Post’s third quarter of fiscal 2015 with cash payments in Post’s fiscal 2016 and 2017. The expenses are a component of the previously announced total estimated one-time charges to achieve cost synergies of between $70 million to $80 million and will not impact Post’s previously announced guidance for fiscal 2015.
“These decisions are expected to result in savings as part of the approximately $50 million cost synergies which were previously announced in connection with the acquisition of MOM Brands,” Post said. “Post currently expects to realize approximately $50 million in run-rate cost synergies by the second full fiscal year following the closing of the MOM Brands acquisition.”Post completed its $1.15 billion acquisition of MOM Brands Co. on May 4. MOM Brands makes Malt-O-Meal and other ready-to-eat cereals. With the acquisition of MOM, Post is now the third largest maker of R.-T.-E. cereals with 18% of the market, trailing only General Mills, Inc. and Kellogg Co.