Post Holdings (POST) Buys Perfection Pet Foods, Boosts Portfolio
Post Holdings, Inc. POST has completed its acquisition of Perfection Pet Foods, LLC. This transaction was finalized on Dec 1, 2023, for $235 million. Perfection Pet Foods is a major producer and packager of private-label and co-manufactured pet food and baked treat products.
This acquisition includes two manufacturing facilities in Visalia, CA, which has enhanced POST's manufacturing capacity, enabling it to insource a portion of its current pet food business. It also provides the company with an entry point into the private label and co-manufacturing pet food category.
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Inside the Headlines
Post Holdings forecast that Perfection Pet Foods, inclusive of stand-up costs, will contribute $25 million to adjusted EBITDA during the year following the conclusion of the acquisition.
This strategic move aligns with Post Holdings' wider objectives in the pet food industry. This was also demonstrated by the company’s previous acquisition of various pet food brands and the private-label pet food business from The J.M. Smucker Co. in April 2023. These acquisitions help diversify the company's product portfolio and create growth opportunities in the pet food industry.
What’s More?
The Zacks Rank #3 (Hold) company has undertaken various acquisitions over time that have strengthened its product base and have been accretive to its performance. Some notable acquisitions in the past few years include Lacka Foods Limited (April 2022), which is a U.K.-based marketer of UFIT high-protein shakes.
In June 2021 and February 2021, the company acquired TreeHouse Foods' RTE Cereal Business and Almark Foods, respectively. In the same year, it purchased the Peter Pan peanut butter brand and partnered with plant-based meat company Hungry Planet.
Other key acquisitions include Henningsen Foods (2020), Bob Evans (2018) and MOM Brands (2015). On the flip side, on Mar 10, 2022, Post Holdings concluded the distribution of 80.1% of its interest in BellRing Brands, Inc. to its shareholders. Apart from this, Post Holdings divested the Willamette Egg Farms business on Dec 1, 2021.
POST's focus on optimizing its portfolio remains a driver. In this regard, the acquisition of Perfection Pet Foods will likely add to the company’s growth story. Shares of the company have gained 2.9% in the past six months against the industry’s decline of 10.9%.
Stocks to Consider
We have highlighted three better-ranked stocks, namely MGP Ingredients, Inc. MGPI, Celsius Holdings CELH and The Kraft Heinz Company KHC.
MGP Ingredients produces and markets ingredients and distillery products to the packaged goods industry. The company currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for MGP Ingredients’ current financial-year sales and EPS suggests growth of 6% and 14.2%, respectively, from the year-ago reported figures. MGPI has a trailing four-quarter earnings surprise of 16.2%, on average.
Celsius Holdings, which offers functional drinks and liquid supplements, currently carries a Zacks Rank #2. CELH delivered an earnings surprise of 81.6% in the third quarter of 2023.
The Zacks Consensus Estimate for Celsius Holdings’ current financial-year sales and earnings suggests growth of 98.5% and 184.1%, respectively, from the year-ago reported numbers.
The Kraft Heinz Company is one of the largest consumer packaged food and beverage companies. The company currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for The Kraft Heinz Company’s current financial-year sales and earnings suggests growth of 1.1% and 6.5%, respectively, from the year-ago reported numbers. KHC has a trailing four-quarter earnings surprise of 9.9%, on average.
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Post Holdings, Inc. (POST) : Free Stock Analysis Report
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