Post Holdings, Inc. (NYSE:POST), on Tuesday, disclosed that it entered into a definitive agreement to acquire 8th Avenue Food & Provisions, Inc.
Post will retire 8th Avenue’s outstanding net debt as part of the deal and purchase all equity interests, resulting in a net payment of around $880 million.
The acquisition price includes an assumption of $111 million in finance leases, and the balance will be paid in cash to settle outstanding debt and to purchase the remaining equity interests not already held by Post.
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The transaction will be financed through a mix of available cash and borrowings under Post’s existing revolving credit line.
The deal is anticipated to slightly increase Post’s leverage, with the acquisition-adjusted net leverage ratio expected to be about 4.6x at closing.
8th Avenue operates in several categories, including branded and private-label dry pasta, as well as private-label nut butters, granola, and fruit and nut products.
The acquisition brings several strategic benefits to Post, including in-house production of its Peter Pan peanut butter, entry into the dry pasta market through the Ronzoni brand, and expanded presence in the growing granola segment of ready-to-eat cereals.
The transaction is expected to close on July 1, 2025, during Post’s fiscal fourth quarter, pending customary closing conditions.
Following the acquisition, 8th Avenue’s financial performance will be included under the Post’s Consumer Brands segment.
Post expects 8th Avenue will contribute around $115 million in adjusted EBITDA over the 12 months post-closing, excluding expected cost synergies.
These synergies are projected to reach an annual run rate of roughly $15 million by the end of fiscal 2026.
Additionally, 8th Avenue is expected to enhance Post’s free cash flow generation, supporting its focus on cash efficiency and maintaining capital allocation flexibility.
Subject to the successful closing of the 8th Avenue acquisition on July 1, 2025, Post updated its fiscal 2025 adjusted EBITDA guidance to a range of $1.46 billion–$1.5 billion, up from the previous range of $1.43–$1.47 billion.
As of March 31, 2025, Post’s cash and cash equivalents stood at $617.6 million.
Investors can gain exposure to the stock via First Trust Cons. Staples AlphaDEX (NYSE:FXG) and First Trust Horizon Managed Volatility Small/Mid ETF (NYSE:HSMV).
Price Action: POST shares closed lower by 0.90% at $109.21 on Tuesday.
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