Post Holdings to acquire Bob Evans Farms

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Post Holdings has agreed to purchase Bob Evans Farms, with the transaction expected to be finalized in 2018. | Photo courtesy of Bob Evans Farms

Post Holdings has agreed to acquire Bob Evans Farms for $77 per share or about $1.5 billion.

Upon finalization of the acquisition, Post Holdings, the parent company of egg, potato, pasta and cheese business Michael Foods, plans a restructuring that will place Michael Foods’ retail business under the Bob Evans unit, while Michael Foods will continue to oversee its current commercial foodservice operations.

Restructuring of business units

Speaking during a conference call on September 19, Post Holdings CEO Rob Vitale, explained the restructuring.

“This acquisition will allow us to separate our refrigerated portfolio to focus on distinct opportunities for both retail and foodservice,” Vitale explained. “Upon closing of the acquisition of Bob Evans, we expect to operate two businesses – refrigerated retail and commercial foodservice.”

Mike Townsley, currently the president and CEO of Bob Evans Farms, will lead the refrigerated retail business, which will include Bob Evans and the existing Michael Foods retail egg, potato and cheese business.

Jim Dwyer, president and CEO of Michael Foods, will continue in his current role managing the commercial foodservice egg, potato and pasta business, which will now also include Bob Evans’ foodservice business.

“We believe this organizational structure will facilitate growth and synergy realization allowing each business to focus on their respective strengths and capabilities,” said Vitale.

Post Holdings acquired Michael Foods in 2014.

Transaction expected to be finalized in 2018

The transaction, which was approved by the boards of directors of both companies, is expected to be completed in the first calendar quarter of 2018, Post’s second quarter of fiscal year 2018, subject to customary closing conditions including the expiration of waiting periods under U.S. antitrust laws and approval of Bob Evans’ stockholders.

Founded in 1948, Bob Evans is a leading producer and distributor of refrigerated potato, pasta and vegetable-based side dishes, pork sausage, and a variety of refrigerated and frozen convenience food items under the Bob Evans, Owens, Country Creek and Pineland Farms brands. Bob Evans also has a growing foodservice business, representing approximately 35 percent of its volume. The foodservice business sells a range of products, including sausage, sausage gravy, breakfast sandwiches and side dishes, which are made to match individual customer specifications.

The transaction is expected to be financed with cash on hand and through borrowings under Post Holdings’ revolving credit facility.

Roy Graber is a staff reporter at WATT Global Media. Contact Graber via email at rgraber@wattglobal.com.

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