Post to Buy Glencore’s Pasta Unit for $370 Million
Post Holdings Inc. (POST), the maker of Raisin Bran and Honey Bunches of Oats cereals, agreed to buy Glencore Xstrata Plc (GLEN)’s Dakota Growers Pasta Co. for $370 million to expand its food offerings.
The acquisition is set to be completed in January and will add about $300 million to sales and as much as $46 million to earnings before interest, taxes, depreciation and amortization, St. Louis-based Post said yesterday in a statement. The cash deal will be financed using cash on hand and as much as $200 million in committed debt financing, Post said.
Chairman and Chief Executive Officer Bill Stiritz has been buying products such as Premier Nutrition supplements and Hearthside Food Solutions’ organic cereals and snacks since his company was spun off from Ralcorp Inc. last year. The North American pasta market is worth about $5 billion a year, Post said in yesterday’s statement.
Post climbed 4.6 percent to close at $43.86 in New York yesterday. Glencore, based in Baar, Switzerland, rose 0.1 percent to 341.90 pence in London. Dakota Growers is based in Carrington, North Dakota.
Peter Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a non-executive director of Glencore Xstrata.
To contact the reporter on this story: Minsi Chung in New York at email@example.com
To contact the editor responsible for this story: Robin Ajello at firstname.lastname@example.org