Bob Evans Farms (BOBE) to be acquired by Post Holdings (POST) for $77.00/share

   

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Post Holdings (POST) to acquire Bob Evans Farms for $77.00/share, a $1.5 bln deal at a 15% premium; Post also reaffirms FY17 EBITDA

Post (POST) will acquire Bob Evans for $77.00 per share. The highly complementary combination will significantly strengthen Post's portfolio of brands, expand choices for customers and increase Post's presence in higher growth categories of the packaged food market. The equity value of the transaction is ~$1.5 billion (15% premium).

Post expects to combine its existing refrigerated retail egg, potato and cheese business with Bob Evans, establishing a refrigerated retail business within Post, which will be led by Mike Townsley, Bob Evans' current President and CEO. Jim Dwyer will continue in his current role as President and CEO of the Michael Foods Group, managing the commercial foodservice egg, potato and pasta businesses, which will include the Bob Evans foodservice business.

Immediately accretive to Post's top-line growth, Adjusted EBITDA margins and free cash flow: Post management expects Bob Evans to contribute ~$107 million of adjusted EBITDA on an annual basis, which is the midpoint of Bob Evans' current fiscal year 2018 adjusted EBITDA outlook. This outlook is before the realization of cost synergies which Post management expects to be ~$25 million annually by the third full fiscal year post-closing, resulting from benefits of scale, shared administrative services and infrastructure optimization.

Post management has affirmed its fiscal 2017 Adjusted EBITDA guidance range of $975-990 million