NEW YORK (The Deal) -- Post Holdings (POST) on Thursday announced plans to acquire private equity-backed MFI Holding for $2.45 billion in a bid to expand the cereal giant's presence on the supermarket shelf.
MFI is parent of Michael Foods Group, a maker of egg products, refrigerated potato offerings and dairy goods under brands including Papetti's, All Whites, Better 'n Eggs and Crystal Farms. The company is currently owned by a consortium including GS Capital Partners, Thomas H. Lee Partners and other investors.
The deal would be St. Louis-based Post's largest to date. The company said it would give it a group of products with leading market positions in growing food categories, continuing Post's strategy of investing in areas poised to benefit as consumers increasingly consume breakfast on-the-go.
"This acquisition is exactly what we look for in an investment," Post chairman and CEO Bill Stiritz said in a statement, praising the company's management and saying "we look forward to continuing to build this substantial business with them."
Post-deal Michael Foods will continue to be run by existing management, including CEO Jim Dwyer.
Post in February agreed to acquire the PowerBar and Musashi brands from Switzerland's Nestle for an undisclosed sum.
Terms of the deal call for Post to pay $2.45 billion in cash at closing and to make an additional payment of $50 million on the first anniversary of closing intended to represent the parties' estimate of the value of certain Michael Foods tax benefits. Post said expects the purchase to contribute to earnings per share, with about $10 million in annual synergies expected resulting from benefits of scale.