Pets Market

Post Holdings entering pet food market

ST. LOUIS — Post Holdings, Inc., is acquiring several pet food brands and manufacturing assets from the JM Smucker Co. for approximately $1.2 billion. The acquisition will give Post a compelling entry point into the growing pet food category, according to the company.

Brands to be acquired include Rachael Ray Nutrish, Nature’s Recipe, 9Lives, Kibbles ‘n Bits and Gravy Train. Combined the brands generated sales of $1.4 billion in the year ended April 30, 2022, Post said.

Manufacturing assets to be included in the deal are processing plants in Lawrence, Kan., and Meadville, Pa., and distribution facilities in Bloomsburg, Pa.

Once the acquisition is completed, Post Holdings plans to create a new pet food platform within Post Consumer Brands. Nicolas Catoggio will continue in his role as president and chief executive officer of Post Consumer Brands and will see his responsibilities expand to include management of North American ready-to-eat cereal and peanut butter as well as the new pet food business.

“We expect this acquisition to continue our history of creating value with a buy and build approach to categories,” said Robert V. Vitale, president and CEO of Post Holdings. “These iconic brands are ideally suited to this strategy.”

Post management expects the acquisition to contribute approximately $100 million in adjusted EBITDA in the 12 months following the close of the acquisition and before the realization of cost synergies, which the company expects to be $30 million annually by the third full fiscal year post closing, resulting from benefits of scale across logistics, procurement and administrative services.

“This divestiture supports our strategy to prioritize investments and resources in the areas of our business that offer the strongest growth and profit potential,” said Mark Smucker, president and CEO of JM Smucker. “In our pet business this is reflected in our focus on dog snacks and cat food, anchored by our Milk-Bone and Meow Mix brands, respectively.

“Portfolio optimization and strategic resource allocation remain key drivers of our long-term growth. The execution of this proven strategy has helped us streamline our business, improve margin mix, and position the company to deliver continued shareholder value.”

The transaction, subject to closing conditions, is expected to be completed in the second quarter of calendar 2023.

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