Post Holdings Buys Cereal Business from TreeHouse Foods for $85M


Consumer packaged goods company Post Holdings (POST) has acquired a ready-to-eat (RTE) cereal business from TreeHouse Foods for a consideration of $85 million.

The acquired RTE business includes two facilities situated in Ohio and Nevada with a range of production capabilities in batch and extruded products, an R&D facility, and inventory of about $30 million in value.

Post expects the acquisition to be modestly dilutive to its Fiscal 2021 adjusted EBITDA and accretive in Fiscal 2022. (See Post Holdings Corp stock analysis on TipRanks)

On May 10, Truist Financial analyst William Chappell reiterated a Buy rating on the stock and increased the price target to $125 (8% upside potential) from $110.

Chappell views the stock favorably on account of a stable legacy business and scope for “ample” upside to estimates through past and future acquisitions.

Consensus among analysts is that Post Holdings is a Strong Buy based on 5 Buys and 1 Hold. The average analyst price target of $127 implies 9.8% upside potential.  Shares have gained about 31% over the past year.

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