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Post to pay $1.15 billion for MOM Brands

Post is to acquire MOM Brands who operate in the ready-to-eat (“RTE”) cereal value segment for $1.15 billion. The combined company will be the third largest provider of RTE cereal with a combined dollar share of approximately 18%, as measured by Nielsen for the 52 weeks ended December 27, 2014. “For Post, this is the right […]

Post is to acquire MOM Brands who operate in the ready-to-eat (“RTE”) cereal value segment for $1.15 billion. The combined company will be the third largest provider of RTE cereal with a combined dollar share of approximately 18%, as measured by Nielsen for the 52 weeks ended December 27, 2014.

“For Post, this is the right move, at the right price, in the right category,” said Rob Vitale, Post’s President and CEO. “After a century of spirited rivalry between MOM Brands and Post, we now look forward to combining our strengths.”

Together, Post and MOM Brands will own a diverse portfolio of complementary RTE and hot cereal products. The transaction is said to significantly increase Post’s presence in the growing bagged and hot cereal segments and to solidify Post and MOM Brands’ leadership in the value segment of the RTE cereal category.

“I have admired MOM Brands for nearly 50 years,” said Bill Stiritz, Post’s Executive Chairman. “I am delighted that Post and MOM Brands will finally be together. It is one of the best strategic and financial fits of any transaction in which I have been involved.”

The transaction is expected to be completed by the third calendar quarter of 2015, Post’s fiscal fourth quarter, subject to customary closing conditions including the expiration of waiting periods under U.S. antitrust laws. The transaction has been approved by MOM Brands’ shareholders.

Post management believes this combination will drive increases in Post’s long-term profitability and EBITDA and cash flow growth, resulting in substantial additional cash flow generation and enabling Post to reduce leverage and fund future growth over the long-term. The transaction is expected to be immediately accretive to Post’s Adjusted EBITDA margins and free cash flow, excluding one-time transaction expenses.

MOM Brands will be merged with Post Foods – currently part of Post’s Consumer Brands Group. The combined cereal business will be led by Richard R. Koulouris, who Post announced today will be joining the company on February 9th.

Post says that Koulouris brings considerable CPG senior executive level experience. In addition to his 35 years in the trade, he has significant experience in integrating acquisitions. Mr. Koulouris has served as president of several business units during his various assignments and will report to Mr. Vitale.

Chris Neugent, current Chairman and CEO of MOM Brands, will lead the MOM Brands business as President reporting to Koulouris. Post and MOM Brands will establish a transition team comprised of members of both companies to prepare for and to oversee the integration of the businesses.

Jim Holbrook, current President and CEO of Post’s Consumer Brands Group, will continue in that role managing the Premier Nutrition, Dymatize and PowerBar businesses. Tony Shurman, current General Manager of Post Foods, will continue in that role, reporting to Mr. Koulouris.

“I am pleased to welcome Rich, Chris and the entire MOM Brands team to Post,” said Vitale.