Michael Foods reportedly close to sealing $2.5bn deal

US-based egg distributor Michael Foods Group is reportedly close to selling itself in a deal worth around $2.5bn.

The company is in advanced negotiations and evaluating binding bids from Tyson Foods and Post Holdings to finalise a deal, reported Reuters citing sources with knowledge of the matter.

Michael Foods has yet to decide which party to sell to, the sources added.

A deal is expected to be concluded within the next two weeks, and it would be the largest for both Tyson and Post in recent years.

Tyson’s last major purchase was the acquisition of IBP for $3.2bn in 2001, while Post has made a series of takeovers in the past year, including Golden Boy Foods, Dakota Growers Pasta, PowerBar, Dymatize Enterprises and Premier Nutrition.

According to a Reuters report in December 2013, Goldman Sachs and Bank of America Merrill Lynch were hired by Michael Foods on a potential sale.

The egg and dairy products producer has since attracted bids from various parties, including TreeHouse Foods, and private equity firms Clayton Dubilier & Rice, Golden Gate Capital and Oaktree Capital Management.

In 2010, Goldman Sachs Capital Partners acquired Michael Foods from private investor Thomas H Lee Partners for around $1.7bn, wherein the private equity firm retained about 20% as part of the transaction.

Michael Foods is a food processor and distributor with business in egg products, refrigerated grocery and potato products under the Papetti’s, Crystal Farms, AllWhites, and Simply Potatoes brands.

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Image: Michael Foods offers egg products, refrigerated grocery and potato products. Photo courtesy of amenic181 at FreeDigitalPhotos.net.