Post Holdings to fully acquire 8th Avenue for US$880M
The transaction is expected to close on July 1.
USA – Post Holdings has announced its plan to purchase the remaining shares of 8th Avenue Food & Provisions, a fellow U.S. manufacturer, for US$880 million.
Post Holdings indicated that the transaction will also eliminate 8th Avenue’s outstanding net debt and involve the assumption of US$111 million in finance leases.
“With this acquisition, we further our strategy of tactical private-label positioning alongside leading brands,” said Rob Vitale, the President and CEO of Post.
Approximately 1,580 employees will join Post as a result of this acquisition, which will also include the manufacturing of Post’s Peter Pan peanut butter.
Post anticipates that the acquisition will contribute approximately US$115 million in adjusted EBITDA in the 12 months following the completion of the deal, excluding expected cost synergies, which are projected to reach an annual run-rate of about US$15 million by the end of Post’s 2026 fiscal year.
8th Avenue was established in 2018 when Post consolidated its private-label businesses, a move supported by the private equity firm Thomas H. Lee Partners.
In 2021, 8th Avenue acquired the Ronzoni pasta brand from Spain’s Ebro Foods. The company produces a variety of products, including both branded and private-label pasta, as well as private-label nut butter and granola.
Post also updated its fiscal year 2025 adjusted EBITDA guidance to a range of US$1.46 billion to US$1.5 billion, an increase from its previous forecast of US$1.43 billion to US$1.47 billion.
In May, Post, which has been associated with a potential acquisition of U.S. food company Lamb Weston, indicated that it is revising its approach to mergers and acquisitions.
Vitale noted common themes among food manufacturers recently and remarked that uncertainty in the capital markets complicates M&A valuations.
In April, the U.S. food major announced the closure of two of its cereal manufacturing facilities in North America, citing a declining market for ready-to-eat cereals.
For the quarter ending March 31, Post Holdings reported a 36% decline in net income, which fell to US$62.6 million, or US$1.03 per share, down from US$97.2 million, or US$1.48 per share, the previous year.
Founded in 1895, Post Holdings, Inc. is an American consumer packaged goods holding company based in St. Louis, Missouri, with operations across various categories including center-of-the-store, refrigerated, food service, and food ingredients.
The company currently employs over 11,000 people, and its Post Consumer Brands division manufactures, markets, and sells both branded and private-label products, primarily focusing on breakfast cereals.
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