Post Foods, a US-based cereal brands manufacturer, has agreed to acquire the branded and private label cereal, granola and snacks business of Hearthside Food Solutions in an all-cash deal worth $158m.
Hearthside Food Solutions is a portfolio company of the private equity firm Wind Point Partners and is a contract manufacturer of consumer baked foods and snacks.
Under the terms of the deal, Post Foods will acquire assets from Hearthside including the Golden Temple, Peace Cereal, Sweet Home Farm and Willamette Valley Granola company brands, as well as its private label granola business. Both the private label and the acquired branded products are sold primarily through the natural and health stores.
The acquisition includes a 135,000ft2 manufacturing facility, which produces a range of product and package formats, and a 30,000ft2 finished goods warehouse in Eugene, Oregon, where the business will continue to be based.
Following the acquisition, Post plans to integrate the acquired business with its Attune Foods business, a branded ready to eat cereal business, which it acquired in December 2012. The expanded Attune Foods will continue to operate independently and will report to Post Holdings president and chief operating officer Terence Block.
Post chairman and chief executive officer Bill Stiritz said: "This acquisition will provide us with expanded presence with new retail partners and will be accretive to both top-line growth and earnings," Stiritz added.
The transaction, which is subject to certain closing conditions and third party consents, is expected to be completed by June 2013.
Post Foods products include from whole grain and fiber to lower sugar offerings. Its brands include Honey Bunches of Oats, Pebbles, Great Grains, Post Shredded Wheat, Post Raisin Bran, Grape-Nuts, and Honeycomb.
