#United States #St. Louis #share repurchase #Post Holdings #8th Avenue

Post Holdings Takes Strategic Step with Pasta Business Sale

Post Holdings, Inc., a significant player in the consumer packaged goods marketplace, has made headlines by announcing the sale of its pasta division from 8th Avenue Food Provisions, Inc. to Richardson (US) Holdings Limited for an impressive $375 million in cash. Alongside this, the company will transfer about $80 million worth of leaseback financial obligations to Richardson as part of the transaction.

Details of the Transaction

This announcement, made on August 29, 2025, details a move that is expected to close by the conclusion of Post’s first fiscal quarter in 2026, assuming all standard closing conditions are met. Previously, Post had acquired 8th Avenue only two months earlier, on July 1, 2025, positioning this divestment as a swift strategic shift. After the transaction, Post will retain control over other brands within 8th Avenue, including its nut butters, fruit and nut products, and granola. These are set to be integrated into Post's Consumer Brands segment.

In discussing anticipated earnings, Post revealed projections that the retained segments of 8th Avenue could add approximately $45-50 million to the company's Adjusted EBITDA in the fiscal year 2026, prior to realizing cost synergies. The firm expects that annual run-rate synergies will reach around $15 million by the end of the same fiscal year. Hence, the effective multiple for the remaining business will be under seven times the adjusted EBITDA, aligning with Post’s acquisition metrics from previous announcements.

Share Repurchase Authorization

Adding to investor confidence, Post’s Board of Directors authorized a new share repurchase program worth $500 million, effective immediately from August 29, 2025. This decision follows the repurchase of approximately $304.8 million under the previous share repurchase plan, which was initiated on February 10, 2025, and subsequently canceled just days before this announcement.

The company plans to execute the repurchase in various ways, including open market purchases and potential private transactions. Although the authorization allows for significant buybacks, it does not commit Post to repurchase a specific number of shares, maintaining flexibility in operations depending on market conditions.

Financial Context and Non-GAAP Measures

In the context of financial performance metrics, Post is employing both Adjusted EBITDA and a synergized acquisition multiple as non-GAAP measures. These metrics are pivotal for presenting a clear picture of the underlying performance of the business, enabling analysts and investors to gauge future profitability and operational efficiency effectively.

Post’s adjusted EBITDA, which excludes interest, taxes, depreciation, and amortization, serves as a crucial indicator for evaluating operational performance. Likewise, the synergized acquisition multiple gives insight into the valuation of remaining assets post-acquisition, making it a vital supplement alongside the company’s financial statements prepared under U.S. GAAP.

Looking Ahead

While the news of this sale and the share repurchase plan creates a positive narrative for Post Holdings, company management acknowledges the inherent uncertainties surrounding forward-looking statements. Factors that could affect the anticipated outcomes include regulatory approvals for the transaction and ongoing economic conditions. The company emphasizes that future financial projections are based on assumptions that might not materialize, which underscores the speculative nature of such forecasts.

In summary, Post Holdings is strategically positioning itself to maximize value by streamlining its operations through the sale of its pasta business while simultaneously reaffirming its commitment to returning capital to shareholders. As this multifaceted strategy unfolds, it highlights Post's focus on optimizing its portfolio and enhancing shareholder value, setting the stage for potential growth in the coming fiscal periods.

For more insights into Post Holdings, visit www.postholdings.com.