* To buy business from affiliates of GS Capital Partners,
Thomas H. Lee Partners
* Expects deal to add to earnings per share, excluding
* Says has obtained committed financing of $1.765 bln
(Adds details on Michael Foods' business, synergies, advisers)
April 17 Cereal maker Post Holdings Inc
said it will buy egg and dairy producer and distributor Michael
Foods Inc for $2.45 billion in its largest-ever deal.
The deal will let the maker of Raisin Bran and Honey Bunches
of Oats cash in on the growing popularity of health foods,
making it a major producer of processed protein food.
"Post remains focused on diversifying its business to
capitalize on shifts in consumer behavior towards increased
consumption of protein and away-from-home breakfast occasions,"
the company said on Thursday.
Reuters reported last week that Post Holdings and U.S. meat
processor Tyson Foods Inc were the final bidders for
Michael Foods, known for brands such as Papetti's, All Whites,
Better 'n Eggs and Simply Potatoes.
Post has been aggressively pursuing deals in the last 12
months, a year after it was spun off from Ralcorp Holdings.
The company has bought Dakota Growers Pasta Co, peanut
butter maker Golden Boy Foods Ltd, sports nutrition brand
PowerBar, protein bar maker Dymatize Enterprises LLC and dietary
supplements company Premier Nutrition Corp.
Post said on Thursday it will buy Michael Foods, which
produces and distributes specialty eggs, refrigerated potatoes,
cheese and other dairy products, from affiliates of Goldman
Sachs Capital partners, Thomas H. Lee Partners LP, and other
Minnetonka, Minnesota-based Michael Foods was bought by
Goldman Sachs Group Inc's private equity arm for about
$1.7 billion in 2010 from buyout firm Thomas H. Lee Partners,
who bought Michaels Foods in 2003 and has retained about 20
percent of the business.
Michael Foods posted operating profit of $163.9 million in
2013, up 22 percent from a year earlier.
Post said it expects Michael Foods' adjusted earnings before
interest, taxes, depreciation and amortization for 2014 to be
between $255 million and $270 million.
The company said it expects the deal to add to earnings per
share, excluding transaction costs. It also expects $10 million
in synergies from the deal.
Post said it will also pay $50 million on the first
anniversary of the deal's closing, expected in the second
Michael Foods Chief Executive Jim Dwyer along with its
management team will continue to lead the business.
Post said it will fund the deal with committed financing of
up to $1.765 billion and cash in hand.
Lewis, Rice & Fingersh, LC are acting as legal advisers to
Post. Barclays will also advise the company.
BofA Merrill Lynch and Goldman Sachs are financial advisers
to Michael Foods. Fried, Frank, Harris, Shriver & Jacobson LLP
are its legal advisers.
(Reporting by Siddharth Cavale in Bangalore; Editing by Joyjeet