Move over Sugar Bear, organic is the next direction for Post
By Jay Keller
Post Holdings, Inc., the manufacturer of ready-to-eat cereals like Pebbles, Grape-Nuts, Alpha-Bits and Golden Crisp is adding organic and all-natural selections to its family of cereals thanks to Thursday’s acquisition of Golden Temple brands from Hearthside Food Solutions, a Wind Point Partners portfolio company.
Also joining the Post family are the granola-makers Sweet Home Farm and Willamette Valley, companies who each boast of a long tradition of baking up organic breakfast offerings and “good-for-you” snacks..
Terms of the deal, which expands Post’s participation in a high-growth area of the cereal category, call for $158 million in cash to be paid at the time of closing, which the company hopes wrap up by June 2013.
Future plans for product rollout have yet to be disclosed and further announcements will be made after Post readies the management of new facilities and brands acquired in the transaction.
“This acquisition will provide us with expanded presence with new retail partners and will be accretive to both top-line growth and earnings,” Post Chairman and CEO Bill Stiritz said in a statement.
Wind Point invested in Hearthside in partnership with Rich Scalise, a 35-year veteran of the food industry, who joined as CEO in 2009.
The sale of Golden Temple, a subsidiary brand acquired by Hearthside in 2010, provides an attractive return for Wind Point, especially after a strong three-year performance and growth.
“The Golden Temple divestiture will allow Rich [Scalise] and his team to focus exclusively on Hearthside’s core business of contract manufacturing,” Wind Point spokesman Mark Burgett said in company statement announcing the deal.
Through the transaction, Post said in the statement the company expects to add approximately $70 million to net sales for the year.
Scalise commented on the excellent performance and growth of Golden Temple brands over the past three years, saying the products have a strong market position that will be an “excellent addition to Post’s product portfolio.”
Post plans to discuss the acquisition and future plans for the new line of organic and natural products on May 13 during the company’s fiscal briefing.