Post Holdings based in St. Louis, Missouri, a consumer packaged goods holding company, intends to acquire the assets of Perfection Pet Foods for US$235 million. The acquisition of the pet food industry is on track to complete in the late fourth quarter of calendar year 2023, which aligns with the first quarter of the Post 2024 fiscal year.
Perfection manufactures and packages pet food and baked treat products under private label and co-manufacturing arrangements. Post Holding’s acquisition includes two Perfection manufacturing facilities located in Visalia, California. These facilities will provide Post with expanded manufacturing capabilities, allowing the company to bring a portion of its existing pet food business in-house. Upon completion of this acquisition, Perfection will be integrated into the Post Consumer Brands segment.
Taking into account initial setup costs, Post management expects Perfection to make a significant contribution, amounting to approximately US$25 million of Adjusted EBITDA, in the next 12 months following completion of the acquisition. In addition to this financial benefit, Post anticipates the acquisition will result in a tax advantage for the company, with a net present value estimated at approximately US$20 million. This strategic move is also expected to ease the need for future capital expenditures previously earmarked for manufacturing capacity expansion.
Smucker sells Nutrish, 9Lives, other pet food brands
In February, Smucker executives announced plans to sell several pet food brands to Post Holdings. The transaction includes the Rachael Ray Nutrish, 9Lives, Kibbles ‘n Bits, Nature’s Recipe, and Gravy Train brands as well as Smucker’s private label pet food business. Smucker’s sale of these brands is valued at approximately US$1.2 billion, consisting of US$700 million in cash and approximately 5.39 million shares of Post Holdings, Inc. common stock. The deal includes related trademarks and licenses, and manufacturing and distribution facilities in Bloomsburg, Pennsylvania, USA as well as its manufacturing facilities in Meadville, Pennsylvania and Lawrence, Kansas, USA.
