Post is on lookout for M&A deals, CEO says


Dive Brief:

  • Post Holdings CEO Rob Vitale said on the company’s quarterly earnings call that the food manufacturer has a cash-rich balance sheet it could use to be an “advantaged buyer in a challenging financing environment.”
  • Vitale told analysts earlier this month an August fundraising gave access to cheaper debt that is not as easily available today. This could help place it in a favorable position with companies Post is looking to buy. “We welcome all opportunities,” he said.
  • Post, which has been built through acquisitions, has a large presence in the food space with a diversified portfolio including Bob Evans refrigerated dinner sides, Peter Pan peanut butter and Michael Foods’ eggs.

Dive Insight:

Just a few years ago, St. Louis-based Post was among the most active investors in the M&A category.

It participated in funding rounds from companies such as plant-based meat startup Hungry Planet and PeaTos, the cheeky challenger to Frito-Lay that makes pea-based versions of Cheetos and Funyuns. It also snapped up Almark Foods, a provider of hard-cooked and deviled egg products, and Peter Pan peanut butter from Conagra Brands.

Recently, it has seen its M&A pace slow considerably. Still, it stands to reason that with a history of being aggressive on investing in young startups and buying brands, Vitale is keeping a close watch on companies looking for cash or eager to divest a brand they no longer want to keep in their portfolio.

With some younger businesses struggling to raise cash, or doing so at lower multiples than just a few months ago, Post and other CPGs are undoubtedly keeping a lookout for opportunistic buys. A company feeling the pressure of higher interest rates hindering its ability to grow could find it easier and more economical to grab a lifeline from a bigger food maker rather than flounder on its own.

After years of multi-billion dollar deals like Conagra buying Pinnacle for nearly $11 billion or Campbell Soup acquiring snack maker Snyder’s Lance for just under $5 billion, CPGs have recently been focusing on single brands that increase their presence in a particular category. During the summer, Mondelēz International bought Clif Bar, a move that further expanded its fast-growing snacking portfolio while giving it a major presence in the high-growth bar business.

While Post has made an effort to boost its presence in plant based, the fact that the publicly traded company is operated much like a private equity firm under Vitale’s oversight likely means it wants to find brands it can grow, regardless of where they are situated in the food space. 

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About the Author

Jervie David Montejar
A food lover who wants to try every delicious dishes around him and spread the news to everyone to try it as well. Finding the latest trends about food and restaurants around Cebu and the rest of the world :) "Life is uncertain. Eat dessert first." -Ernestine Ulmer
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