Ralcorp plans to acquire
Sara Lee dough business
Aug 10, 2011 10:25 AM
Ralcorp Holdings Inc (NYSE: RAH) has entered into a definitive agreement to acquire the North American private brand refrigerated dough business of Sara Lee Corporation (NYSE: SLE) for approximately $545 million.
Sara Lee’s refrigerated dough business manufactures and distributes private brand refrigerated dough products in the United States. The business recorded net sales in excess of $300 million for its fiscal year ended July 2010.
This acquisition is expected to be accretive on a GAAP basis by more than $0.30 per share in year one. On a cash basis, Ralcorp expects accretion to be $0.50 per share during the first year. The acquisition is also expected to enhance Ralcorp’s cash flow and generate operational synergies of approximately $6 million to $8 million annually after the third year post-closing, excluding one-time transition costs.
Kevin J Hunt, co-chief executive officer and president of Ralcorp, said, “This transaction will allow Ralcorp to be a private-brand leader in the $1.8 billion refrigerated dough category. Together with the refrigerated dough business, we will continue to provide our customers with the high-quality service and products they have come to expect from Ralcorp.”
The refrigerated dough business employs about 700 people and has manufacturing and distribution facilities in Carrollton TX and Forest Park GA. Upon completion of the transaction, the business will operate as part of a broader Ralcorp Frozen Bakery Products division.
Ralcorp intends to fund the transaction through short-term debt that will be repaid with proceeds from the Post Foods separation. The acquisition is subject to customary closing conditions and regulatory approvals. Ralcorp expects the acquisition to be completed in 60 to 90 days.
© 2013 Penton Media Inc.
Acceptable Use Policy blog comments powered by Disqus