Post Holdings signs deal to acquire Michael Foods for $2.45bn

US-based Post Holdings will take over egg distributor Michael Foods for $2.45bn on a cash-free, debt-free basis from affiliates of private investors GS Capital Partners, Thomas H Lee Partners and others.

Michael Foods provides value-added egg products, refrigerated potato products and cheese and other dairy case products under Papetti’s, All Whites, Better ‘n Eggs, Easy Eggs, Simply Potatoes and Crystal Farms brands.

The deal will be the largest for Post to date and the acquired entity will continue to operate under the current management.

Michael Foods CEO Jim Dwyer said, "We believe our business will benefit from Post’s portfolio management approach of effectively and efficiently investing in profitable growth and margin expansion."

Post chairman and CEO Bill Stiritz said, "We are extremely impressed with the job Jim and his team have done and we look forward to continuing to build this substantial business with them."

For the transaction, Post has received commitments for up to $1.76bn in credit facilities, including a bridge loan of about $340m.

Subject to various closing conditions, the transaction is expected to be completed in Post’s fiscal third quarter.

Post expects Michael Foods to generate adjusted EBITDA of up to $270m for 2014.

Barclays is providing financial advisory services to Post, while BofA Merrill Lynch and Goldman Sachs are financial advisors to Michael Foods.

The deal follows Post’s recent agreement to acquire the PowerBar and Musashi brands from Swiss giant Nestlé.

In the past year, the company has made a series of acquisitions, including Golden Boy Foods, Dakota Growers Pasta, Dymatize Enterprises and Premier Nutrition.