Post Holdings To Acquire MOM Brands In $1.15 Bln Deal

(RTTNews) - Post Holdings, Inc. (POST), announced Monday that it has agreed to acquire privately-owned cereal products maker MOM Brands Company for $1.15 billion on a cash-free, debt-free basis. As per the agreement, Post will pay $1.05 billion in cash and issue the current owners of MOM Brands approximately 2.45 million shares of Post common stock.

Post said it would obtain up to $700 million under a secured term loan facility for the acquisition and to get additional funding for the acquisition through the sale of approximately $240 million of equity.

Upon finalizing the deal, MOM Brands will be merged with Post Foods of Post's Consumer Brands Group. The combined business will be led by Richard Koulouris, effective February 9. Chris Neugent, current Chairman and CEO of MOM Brands, will lead the MOM Brands business as President reporting to Koulouris. Jim Holbrook, current President and CEO of Post's Consumer Brands Group and Tony Shurman, current General Manager of Post Foods will continue in the same roles.

The transaction is expected to be completed by the third calendar quarter of 2015. For the fiscal 2014, Post management estimates MOM Brands had Adjusted EBITDA of between $119 million and $121 million. The combination is expected to create the opportunity to realize approximately $50 million in run-rate cost synergies by the third fiscal year.