ST. LOUIS — Post Holdings, Inc. has agreed to pay more than $680 million for Golden Boy Foods Ltd. and Dymatize Enterprises, L.L.C. — two businesses that are expected to expand its presence in the private label and active nutrition categories.
“Active Nutrition and private label are exciting categories with organic growth and consolidation opportunities,” said William P. Stiritz, chairman and chief executive officer of Post. “I am pleased that Post is continuing its expansion into these segments. We are fortunate to have identified two attractive businesses managed by talented teams.”
Post has agreed to pay $380 million for Dallas-based Dymatize, which manufactures and markets premium protein powders, bars and nutritional supplements under the Dymatize and Supreme Protein brands. Dymatize’s products are sold in the sports nutrition supplement and nutrition bar categories.
Citing Euromonitor data, Post said the global active nutrition category is expected to remain strong with the category projected to grow at a compound annual growth rate of 7% between 2014 and 2017.
“The Dymatize brand has been growing substantially in excess of the market and Post management expects the Dymatize brand to continue to outpace category growth,” Post said. “Dymatize’s vertical integration and science-based model allows product customization for different end market consumers. Post management believes the Dymatize acquisition complements its active nutrition focus by expanding its channel diversification.”
Under terms of the agreement, Post will pay $380 million for Dymatize on a cash-free, debt-free basis and subject to a working capital adjustment, with additional consideration up to $17.5 million contingent upon Dymatize achieving certain profit targets in calendar year 2014. For the nine months ended Sept. 30, 2013, Dymatize had net sales of $146 million and adjusted EBITDA of $23 million.
Post said the purchase of Dymatize is structured to allow it to benefit from amortization of tax basis resulting in a net present value benefit expected to be approximately $40 million to $45 million. The Dymatize transaction is expected to close on or around Feb. 1, 2014, subject to customary closing conditions, including the expiration of waiting periods under the Hart-Scott-Rodino Act.
Dymatize will continue to be led by current president and chief executive officer, Greg Venner.
Post also has reached agreement to acquire privately owned Golden Boy from affiliates of Tricor Pacific Capital, Inc. and other shareholders for C$320 million ($300 million). Based in Burnaby, B.C., Golden Boy is a North American manufacturer of private label peanut and other nut butters, as well as dried fruit, baking and snacking nuts. Golden Boy is a key supplier to the U.S. and Canadian retail and food service channels and participates in the organic packaged foods category. Golden Boy operates three plants in Canada and two in the United States.
Post expects to combine the Golden Boy business with Dakota Growers Pasta Co., a pending acquisition expected to close in January 2014. Richard Harris, current c.e.o. of Golden Boys, will manage the combined Golden Boy and Dakota Growers business.
“The acquisitions establish Post’s private label platform, creating a business with annual net sales in excess of $500 million for the 12 months ended Sept. 30, 2013,” Post said. The Golden Boy acquisition is anticipated to close on or about Feb. 1, 2014.
Citing Mintel data, Post said the nut butter category is expected to remain strong with the U.S. nut butter retail category projected to grow at a compound annual growth rate of 13% between 2014 and 2017.
For the nine months ended Sept. 30, 2013, Golden Boy had net sales of C$164 million and adjusted EBITDA of C$23 million. Post management expects that during calendar 2014, which extends beyond Post’s fiscal 2014, Golden Boy will generate adjusted EBITDA of C$34 million to C$36 million, before extraordinary, unusual or non-recurring items.
The transactions continue an active acquisition period for Post Holdings over the past year. In September, the company agreed to acquire Dakota Growers Pasta Company, Inc. from Viterra, Inc. for $370 million. Dakota Growers Pasta manufactures a full line of dry pastas for retail, food service and food processors, including whole grain and organic items. In August, the company agreed to acquire the Premier Nutrition Corp., Emeryville, Calif., for $180 million. In late May the company acquired the branded and private label cereal, granola and snack assets of Hearthside Food Solutions L.L.C., Downers Grove, Ill., for $158 million, and in January Post acquired Attune Foods, San Francisco, for an undisclosed amount.