#United States #St. Louis #Post Holdings #Food Acquisition #8th Avenue

Post Holdings Acquires 8th Avenue Food & Provisions

In a strategic move to bolster its portfolio, Post Holdings, Inc. (NYSE: Post) announced on June 3, 2025, that it has entered into a definitive agreement to acquire 8th Avenue Food Provisions, Inc. This acquisition is significant as it positions Post to expand into key categories, further diversifying its product offerings and enhancing its market presence.

The acquisition involves a net payment of approximately $880 million, which will cover the extinguishment of 8th Avenue's outstanding debt and the acquisition of its equity interests. This strategic initiative aligns with Post's goal of tactical private label positioning alongside prominent brands, ensuring a broader market reach.

Strategic Importance of the Acquisition

Rob Vitale, President and CEO of Post, expressed his enthusiasm regarding the acquisition: "With this acquisition, we further our strategy of tactical private label positioning alongside leading brands. I am pleased to welcome back the approximately 1,580 employees of 8th Avenue who will join us as Post colleagues." This incorporation not only emphasizes Post’s commitment to expanding its workforce but also reflects its focus on creating synergy across brands.

8th Avenue contributes to a range of categories, including branded and private label dry pasta, nut butters, granola, and fruit nut products. Notably, this acquisition will enable Post to internalize the manufacturing of its widely recognized Peter Pan® peanut butter and provides a gateway to tap into the competitive dry pasta market with the established Ronzoni® brand.

Moreover, the acquisition highlights the growing demand for granola products, allowing Post to capitalize on a promising segment within the cereal category. This move is expected to boost Post’s operational and financial performance significantly in the coming years.

Financial Implications and Projections

Financially, Post will manage the acquisition price by utilizing its cash reserves and borrowing against its existing revolving credit facility. The deal, expected to close on July 1, 2025, will see Post's adjusted net leverage ratio rise to approximately 4.6x upon completion. This increase is manageable for Post, given its strong cash flow generation model and focus on debt repayment.

In the twelve months following the acquisition, Post expects 8th Avenue to contribute about $115 million in Adjusted EBITDA. This is anticipated to enhance Post's cash generation capabilities, which are vital for servicing debt and facilitating future growth initiatives. Furthermore, management expects to achieve cost synergies with an annual run rate of about $15 million by the end of fiscal year 2026.

In light of the forthcoming acquisition, Post has updated its fiscal year 2025 guidance for Adjusted EBITDA to a range of $1,460-$1,500 million, up from the previous estimate. This optimistic outlook underscores Post's commitment to maintaining a robust financial trajectory, even amidst market challenges and uncertainties.

Conclusion

Post Holdings’ acquisition of 8th Avenue Food Provisions is a strategic enhancement aimed at reinforcing its product diversification and solidifying its position in the consumer packaged goods market. With effective integration and realization of expected synergies, this acquisition may well set the stage for a prosperous future, driving sustained growth and profitability. As the industry moves towards increased consumer demand for diverse food options, Post is well-positioned to capitalize on these trends, paving the way for expansive growth in the years ahead.

Through strategic acquisitions and strong management practices, Post Holdings continues to assert its influence within the consumer goods sector, establishing a foundation for success well into the future.