US – Post Holdings, a consumer-packaged goods holding company, has entered the US pet industry by acquiring brands from J.M.Smucker in a deal estimated to be worth about US$1.2 billion.
The deal centers on six brands; Rachael Ray, Nutrish, 9Lives, Kibbles’n Bits, Nature’s Recipe, and Gravy Train which had combined net sales of US$1.4B in the year ending 30th April 2022.
In addition, Post Holding will gain ownership of three factories in Pennsylvania and Kansas. Post said it will pay $700 million in cash and US$500 million in shares.
The consumer-packaged-goods player showed contentment in acquiring “an established, scaled position in the mainstream and entry premium sub-categories,” and expects to see “additional opportunities for future investments in the pet food category.”
“We expect this acquisition to continue our history of creating value with a buy-and-build approach to categories,” said Rob Vitale, the president, and CEO of Post. Adding that the “iconic brands are ideally suited to this strategy.”
For Smucker, the sale allows it to “prioritize investments and resources in the areas of our business that offer the strongest growth and profit potential according to Mark Smucker, the company CEO.
Mark added that Smucker will remain a major player in dog snacks and cat food following the sale, anchored by brands including Milk-Bone and Meow Mix.
Post’s expansion comes at a time when revenue in the pet food segment is forecast a trajectory rise to reach US$57.63 billion this year and is expected to record a compound annual growth rate of 8.8% through 2027.
To align with market needs, Post plans to create a new pet food platform within Post Consumer Brands, its division that includes many of its popular store offerings.
The company also plans to roll out additional future investments that will create about 1000 jobs.
Under CEO Rob Vitale, Post has, during his 8-year helm, snapped up Almark Foods, a provider of hard-cooked and deviled egg products; Peter Pan peanut butter from Conagra Brands; and Bob Evans’ packaged food business, all focused on food products.