Post Holdings, an American consumer packaged goods company, will acquire select pet food brands from The J.M. Smucker (Smuckers) for approximately $1.2 billion in a move to enter the growing pet food category.

Under the terms of the agreement, American food and beverage products manufacturer J.M. Smucker will receive $700 million in cash and approximately $500 million of new shares of Post Holdings at the closing.

With the acquisition, Post Holdings anticipates to create a new pet food platform within Post Consumer Brands.

As part of the transaction, Post Holdings will acquire dog and cat food brands such as Rachael Ray Nutrish, 9Lives, Nature’s Recipe, Kibbles ‘n Bits, and Gravy Train, with combined annual sales of $1.4 billion for the year ended 30 April 2022.

In addition, Post Holdings will acquire manufacturing and distribution plants in Bloomsburg, Pennsylvania and manufacturing plants in Lawrence, Kansas and Meadville, Pennsylvania.

Rob Vitale — Post Holdings President and CEO said: “We expect this acquisition to continue our history of creating value with a buy and build approach to categories.

“These iconic brands are ideally suited to this strategy. Most importantly, I am delighted to welcome the over 1,000 talented people who will join us as Post colleagues.”

Post Holdings anticipates the pet food business to contribute around $100 million of adjusted EBITDA in the next twelve months, subsequent to the close of the acquisition.

The food and beverage products manufacturer anticipates the transaction to yield annual synergies of approximately $30 million by the third full fiscal year post-closing.

Barclays Capital and Evercore are acting as financial advisors to Post Holdings.

Anticipated to complete early in the second quarter of 2023, Post Holdings’ third quarter of the fiscal year 2023, the deal is subject to regulatory approvals and certain customary closing conditions.

  Food acquisition news, J.M. Smucker, pet food, Post Holdings, Rob Vitale, USA