Post Holdings To Buy Michael Foods For $2.45 Bln - Quick Facts

(RTTNews) - Cereal maker Post Holdings Inc. (POST) announced Thursday that it agreed to acquire MFI Holding Corporation from affiliates of GS Capital Partners, affiliates of Thomas H. Lee Partners and other owners.

As per the terms of the agreement, Post will acquire Michael Foods for $2.45 billion on a cash-free, debt-free basis, subject to working capital and other adjustments.

In addition, Post will make a payment of $50 million on the first anniversary of the closing date, which payment is intended to represent the parties' estimate of the value of certain tax benefits that Michael Foods is expected to realize from payments to be made by or on its behalf in connection with the acquisition.

Michael Foods is a producer of value-added food products and service solutions to customers across the foodservice, retail and food ingredient channels. It has well-known brands such as Papetti's, All Whites, Better 'n Eggs, Easy Eggs, Simply Potatoes and Crystal Farms.

The transaction is expected to be accretive to Post's earnings per share prior to giving effect to purchase accounting adjustments and one-time transaction expenses. Post management expects to recognize approximately $10 million in synergies resulting from benefits of scale.

The company said that Michael Foods will continue to be managed by its existing executive team.

Concurrent with the signing of the agreement, Post noted that it obtained financing commitments under which various lenders have committed to provide up to $1.765 billion in credit facilities, including a committed bridge loan of up to $340 million. Post expects to fund its pending acquisition of the PowerBar and Musashi brands with cash on hand or a draw under the amended revolving credit facility.

The transaction is expected to be completed in the second calendar quarter of 2014, Post's fiscal third quarter, subject to various closing conditions including the expiration of waiting periods required under antitrust laws.