Post Holdings, the parent company of Post Foods and a manufacturer of ready-to-eat cereals, has signed a deal to buy Michael Foods from GS Capital Partners, Thomas H Lee Partners and others.
Michael Foods supplies egg products, refrigerated potato products and cheese and other dairy case products to foodservice, retail and food ingredient segments. It owns brands such as Papetti's, All Whites, Better 'n Eggs, Easy Eggs, Simply Potatoes and Crystal Farms.
Michael Foods CEO Jim Dwyer said, "We believe our business will benefit from Post's portfolio management approach of effectively and efficiently investing in profitable growth and margin expansion."
Post chairman and CEO Bill Stiritz said, "We are extremely impressed with the job Jim and his team have done and we look forward to continuing to build this substantial business with them."
The company secured financing commitments for up to $1.76bn in credit facilities. It plans to replace a portion of the committed financing through the sale of $500m of additional equity.
Post expects Michael Foods to report adjusted EBITDA of between $255m and $270m in 2014.
The transaction is subject to various closing conditions, including regulatory approvals, and is expected to close in the second calendar quarter of 2014.
