As a means of entering the growing nutrition and supplements businesses, Post Holdings (NYSE:POST) has signed a definitive agreement to buy Premier Nutrition Corp. (PNC) in a $180 million all-cash deal, Post announced today.
PNC markets and distributes protein beverages and foods under its Premier Protein brand and nutritional supplements under its Joint Juice brand.
Plans are for PNC to run as an independent subsidiary of Post, including retaining its existing CEO, David Ritterbush. Post Chairman and CEO Bill Stiritz was quoted as saying, "We could not be more impressed with the terrific quality of the Premier team Dave has put together."
On an annual basis, the transaction is expected to add an estimated $130 million to $140 million in sales, and $17 million to $20 million in EBITDA. Additionally, utilizing Post's newly formed subsidiary, Post Acquisition Sub II, and structuring the deal as a reverse subsidiary merger transaction will allow Post to utilize PNC's significant loss carry-forwards and "other tax benefits," Post said. The company expects the tax-related benefits, on a present value basis, are approximately $22 million to $26 million.
The acquisition is expected to close by September and is subject to customary regulatory and closing conditions.
Fool contributor Tim Brugger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.