Post Holdings Inc. (POST:US), the maker of Raisin Bran cereal, agreed to buy the PowerBar and Musashi sports nutrition brands from Nestle SA (NESN) to take advantage of increasing demand for health and fitness related snacks.
Post will combine the divisions with its existing nutrition business to create a unit with annual revenue approaching $550 million, the St. Louis-based company said in a statement today. Terms of the deal will be published within four days, and the transaction is likely to be completed in Post’s fiscal third quarter, according to the statement.
Chairman and Chief Executive Officer William Stiritz has been buying products such as Premier Nutrition supplements and Hearthside Food Solutions’ organic cereals and snacks since Post was spun off from Ralcorp Inc. in 2012. The global active nutrition category is expected to grow at a compound annual rate of 7 percent from 2014 to 2017, Post said.
“It’s truly exciting to continue the transformation of Post and to increase the role active nutrition will play in that transformation,” Stiritz said in the statement.
Stiritz is the third-largest investor in Herbalife Ltd. (HLF:US), a maker of weight-loss shakes and nutritional supplements, with a 7.4 percent stake as of Jan. 29, according to data (HLF:US) compiled by Bloomberg. Stiritz said in November he was willing to take part in a leveraged buyout of the company, which operates in more than 80 countries. Last week, Tim Ramey, an analyst for D.A. Davidson and one of Herbalife’s biggest defenders, joined Post as a director of strategic ventures on a consulting basis.
Nestle, the world’s largest food company, has been scaling back its assets. The Swiss food company agreed in November to sell its Jenny Craig diet business in North America and Oceania to private-equity firm North Castle Partners for an undisclosed amount.
Post fell 0.4 percent to $53.53 on Jan. 31 and advanced 44 percent last year. Nestle rose 0.5 percent to 66.10 Francs at 1:49 p.m. in Zurich. The stock increased 9.6 percent in 2013.
To contact the reporters on this story: Thomas Mulier in Geneva at firstname.lastname@example.org; Lindsey Rupp in New York at email@example.com
To contact the editor responsible for this story: David Risser at firstname.lastname@example.org