Today, Post Holdings (NYSE:POST) announced it would be acquiring Dakota Growers Pasta Company from Glencore Xstrata PLC for $370 million. It is anticipated the transaction will be completed in January.
The transaction will be funded by Post through cash and up to $200 million in debt financing. Post anticipates that on a full-year basis the acquisition will contribute approximately $300 million in sales and between $42 million and $46 million in earnings before interest, taxes, depreciation, and amortization (EBITDA). Dakota Growers will be managed separately from other Post Holdings businesses by its Vice President and General Manager Ed Irion and the other members of the existing management team.
Dakota Growers, located in Carrington, N.D., is a company in the $5 billion North America pasta market, where it is one of the market leaders in foodservice, private label retail, and ingredient channels, according to Post. Dakota Growers has durum wheat milling and pasta production capabilities in Carrington and production capabilities in New Hope, Minn.
Post Chairman and CEO William Stiritz in the company press release said, "With Dakota Growers, Post continues to expand its portfolio into segments of the overall food industry where it sees opportunities to grow and diversify its strong cash flow."
This acquisition is Post's third since May, as it acquired the organic and natural cereal, granola, and snacks businesses of Hearthside Food Solutions in May for $158 million. It also purchased Premier Nutrition Corp., a nutrition and supplements brand, in August for $180 million. The three transactions combined cost Post approximately $708 million, and are expected to contribute approximately $500 million in net sales and $80 million in EBITDA.
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