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Post Holdings to Explore Strategic Alternatives for Private Brands Businesses

St. Louis / MO. (pfh) Post Holdings Inc. a consumer packaged goods holding company, announced it plans to explore a range of strategic alternatives for its private brands businesses, which produce nut butter, dried fruit and nut, pasta and granola products for top retailers, distributors and manufacturers. Post also announced it expects to close the acquisition of Bob Evans Farms Inc. on January 12, 2018.

A New Private Brands Business

Post intends to combine its private brands businesses under the leadership of Jim Dwyer, current President and CEO of Post’s Michael Foods Group. Post plans to explore a range of structural alternatives for its private brands businesses, including an initial public offering, a placement of private equity, a sale of the businesses or a strategic combination.

«We believe Jim Dwyer’s leadership will drive value creation in our strategic private brands businesses», said Rob Vitale, Post’s President and CEO. «We further believe the best structure to support Jim and his team is likely outside of Post’s full ownership and we will aggressively explore creative alternatives involving direct capital and/or strategic partnerships».

«Private brands will continue to be a strong growth driver across all trade channels and customers», said Jim Dwyer. «It’s exciting to create a business singularly focused on partnering with customers to profitably grow our respective businesses».

Post expects to report the private brands businesses (inclusive of Golden Boy, Dakota Growers and Attune Foods) as one segment beginning in the second quarter of fiscal year 2018. These businesses, for the fiscal year ended September 30, 2017, reported net sales of USD 791.2 million, net earnings of USD 43.4 million and Adjusted Ebitda of USD 106.9 million. This financial information does not include standalone costs and corporate cost allocations, including interest expense allocations. Net earnings, interest expense and income tax expense on a standalone basis may differ materially from this presentation. Adjusted Ebitda is a non-GAAP measure. For additional information regarding non-GAAP measures, see the related explanations presented under «Use of Non-GAAP Measure» and «Explanation and Reconciliation of Non-GAAP Measure» later in this release.

There can be no assurance that Post’s exploration of strategic alternatives will result in any transaction or other action by Post. Post has not set a timetable for its exploration process and Post does not intend to comment on or provide updates regarding these matters unless and until it determines that further disclosure is appropriate or required based on the then-current facts and circumstances. This release does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful.

Closing of the Acquisition of Bob Evans Farms

At the special meeting of stockholders of Bob Evans, held on January 9, 2018, the stockholders approved the acquisition of Bob Evans by Post, satisfying one of the closing conditions of the transaction. Post anticipates closing the acquisition on January 12, 2018, subject to the satisfaction of remaining limited closing conditions.

Upon close of the acquisition of Bob Evans, Post will form a refrigerated retail business unit and a foodservice business unit. As previously announced, Mike Townsley, current CEO of Bob Evans, will lead the refrigerated retail business, inclusive of Bob Evans retail business and Michael Foods retail egg, potato and cheese business. Mark Westphal, current CFO of Post’s Michael Foods Group, has been named President of Michael Foods and will lead the foodservice business, inclusive of Michael Foods foodservice egg and potato business and Bob Evans foodservice business.

Use of Non-GAAP Measure

Post uses Adjusted Ebitda, a non-GAAP measure, in this release to supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP). Adjusted Ebitda is not prepared in accordance with U.S. GAAP, as it excludes certain items, and may not be comparable to similarly-titled measures of other companies.

Post management uses certain non-GAAP measures, including Adjusted Ebitda, as key metrics in the evaluation of underlying Company and segment performance, in making financial, operating and planning decisions, and, in part, in the determination of cash bonuses for its executive officers and employees. Management believes the use of non-GAAP measures, including Adjusted Ebitda, provides increased transparency and assists investors in understanding the underlying operating performance of the Company and its segments and in the analysis of ongoing operating trends.