‘Carveout’ sets up Post for more growth

Article Excerpt

POST HOLDINGS INC. $90 (New York symbol POST; Consumer sector; Shares outstanding: 66.6 million; Market cap: $6.0 billion; No dividends paid; Takeover Target Rating: Medium; www.postholdings.com) is a leading maker of packaged foods. The U.S. supplies 87% of its sales. The company has five operating units: Consumer Brands, Michael Foods, Active Nutrition, Private Brands, and Weetabix. Its main brands include Honey Bunches of Oats, Pebbles, Post Selects, Great Grains, Shredded Wheat, Post Raisin Bran, Grape Nuts, Power Bar, and Uncle Sam. In 2012, Ralcorp Holdings spun off its cereals operations as Post Holdings. Since then, the new company has fuelled its growth with acquisitions of other food makers. For example, it recently paid $1.5 billion for Bob Evans Farms’ refrigerated retail business. That includes breakfast sausages, and bacon, egg, potato and cheese products. In April 2017, Post purchased British cereal manufacturer Weetabix for $1.8 billion. It makes the second-most-popular breakfast cereal in the U.K. Thanks to those new businesses, Post’s sales jumped 159.5%, from $2.4 billion in 2014…

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