YASTEST
- Adds highly
complementary portfolio of brands, including a leading brand in
refrigerated side dishes
- Increases
Post's presence in higher growth perimeter of the
store
- Strengthens
Post's position in both refrigerated retail and foodservice
channels
- Immediately
accretive to Post's top-line growth, Adjusted EBITDA margins and
free cash flow
- Post
management reaffirms certain fiscal 2017 guidance
ST. LOUIS and NEW ALBANY, Ohio, Sept. 19, 2017
(GLOBE NEWSWIRE) -- Post Holdings, Inc. (NYSE:POST) ("Post") and
Bob Evans Farms, Inc. (NASDAQ:BOBE) ("Bob Evans") today announced
that they have entered into a definitive agreement in which Post
will acquire Bob Evans for $77.00 per share. The highly
complementary combination will significantly strengthen Post's
portfolio of brands, expand choices for customers and increase
Post's presence in higher growth categories of the packaged food
market.
Founded in 1948, Bob Evans is a leading producer
and distributor of refrigerated potato, pasta and vegetable-based
side dishes, pork sausage, and a variety of refrigerated and frozen
convenience food items under the Bob
Evans, Owens, Country Creek and Pineland
Farms brands. Bob Evans also has a growing foodservice
business, representing approximately 35% of volume. The foodservice
business sells a range of products, including sausage, sausage
gravy, breakfast sandwiches and side dishes, which are made to
match individual customer specifications.
The addition of Bob Evans' highly complementary
portfolio of brands and products will meaningfully enhance Post's
refrigerated side dish offering, provide Post with a presence in
breakfast sausage and will immediately provide Post with a leading
position in the higher growth perimeter of the store. The
combination with Bob Evans will also strengthen Post's presence in
commercial foodservice, create opportunities for future growth and
enhance Post's position as one of North America's largest packaged
food companies.
"We have enormous respect for Bob Evans' success
and are excited about the growth opportunities this combination
will create," said Rob Vitale, President and Chief Executive
Officer of Post Holdings. "Combining with Bob Evans expands our
portfolio of top brands and gives Post a leading position in the
perimeter of the store. We look forward to welcoming the talented
Bob Evans team to Post and working to create a successful future
together."
"We are pleased to join the Post family, combining
our complementary portfolios to the benefit of all of our
stakeholders," said Mike Townsley, President and Chief Executive
Officer of Bob Evans Farms. "This transaction creates enhanced and
certain value for our stockholders, while providing further
resources and reach to deliver the Bob Evans experience to a
broader audience of consumers and retailers. We are very proud of
our 70 year history as a beloved brand and eager to begin this next
chapter of growth."
The transaction, which was approved by the Boards
of Directors of both companies, is expected to be completed in the
first calendar quarter of 2018, Post's second quarter of fiscal
year 2018, subject to customary closing conditions including the
expiration of waiting periods under U.S. antitrust laws and
approval of Bob Evans' stockholders.
Organizational
Structure
Upon closing of the acquisition, Post expects to
combine its existing refrigerated retail egg, potato and cheese
business with Bob Evans, establishing a refrigerated retail
business within Post, which will be led by Mike Townsley, Bob
Evans' current President and CEO. Jim Dwyer will continue in his
current role as President and CEO of the Michael Foods Group,
managing the commercial foodservice egg, potato and pasta
businesses, which will include the Bob Evans foodservice
business.
Financial
Details
The equity value of the transaction is
approximately $1.5 billion. The acquisition purchase price
represents a 15% premium on the 30 day volume weighted average
price (VWAP) of Bob Evans shares. Post expects to finance the
purchase with cash on hand and through borrowings under Post's
existing revolving credit facility. Bob Evans will continue its
dividend payments in the ordinary course of business pending
closing.
Post management expects Bob Evans to contribute
approximately $107 million of adjusted EBITDA on an annual basis,
which is the midpoint of Bob Evans' current fiscal year 2018
adjusted EBITDA outlook. This outlook is before the realization of
cost synergies which Post management expects to be approximately
$25 million annually by the third full fiscal year post-closing,
resulting from benefits of scale, shared administrative services
and infrastructure optimization. One-time costs to achieve
synergies are estimated to be approximately $25 million. The
transaction is expected to be immediately accretive to Post's
top-line growth, Adjusted EBITDA margins and free cash flow,
excluding one-time transaction expenses. For additional information
regarding non-GAAP measures, such as Adjusted EBITDA, see the
related explanations presented under "Use of Non-GAAP Measures"
later in this release.
Outlook
Post management has affirmed its fiscal 2017
Adjusted EBITDA guidance range of $975-$990 million (inclusive of
Weetabix's contribution for the fourth quarter).
Post provides Adjusted EBITDA guidance and
discloses its expectations as to the effect of the Bob Evans
transaction on Post's Adjusted EBITDA, including the expected
annual contribution of Bob Evans, and free cash flow only on a
non-GAAP basis and does not provide a reconciliation of its
forward-looking non-GAAP guidance measures to the mostly directly
comparable GAAP measures due to the inherent difficulty in
forecasting and quantifying certain amounts that are necessary for
such reconciliations, including adjustments that could be made for
non-cash mark-to-market adjustments and cash settlements on
interest rate and cross-currency swaps, provision for legal
settlement, net foreign currency gains for purchase price of
acquisition, transaction and integration costs, restructuring and
plant closure costs, assets held for sale, mark-to-market
adjustments on commodity hedges and other charges reflected in
Post's reconciliation of historical numbers, the amounts of which,
based on historical experience, could be significant. For
additional information regarding Post's non-GAAP measures, see the
related explanations presented under "Use of Non-GAAP Measures"
later in this release.
Additional
Information
UBS Investment Bank, Barclays, Goldman
Sachs and Bank of America Merrill Lynch are acting as
financial advisors to Post. J.P. Morgan Securities LLC acted as
exclusive financial advisor to Bob Evans and provided a fairness
opinion to its Board of Directors.
Conference Call
Post will host a conference call on Tuesday,
September 19, 2017 at 8:00 a.m. EDT in which Robert V. Vitale,
Post's President and Chief Executive Officer, and Jeff A. Zadoks,
Post's Senior Vice President and Chief Financial Officer, will
discuss the acquisition and respond to questions.
Interested parties may join the conference call by
dialing (877) 540-0891 in the United States and (678) 408-4007 from
outside of the United States. The conference identification number
is 87596030. Interested parties are invited to listen to the
webcast of the conference call, which can be accessed by visiting
the Investor Relations section of Post's website at
www.postholdings.com and Bob Evans' website at
investors.bobevans.com.
A replay of the conference call will be available
through Tuesday, September 26, 2017 by dialing (800) 585-8367 in
the United States and (404) 537-3406 from outside of the United
States and using the conference identification number 87596030. A
webcast replay will also be available for a limited period in the
Investor Relations section on Post's and Bob Evans' websites.
Use of Non-GAAP
Measures
Post uses Adjusted EBITDA and free cash flow, both
of which are non-GAAP measures, in this release to supplement the
financial measures prepared in accordance with U.S. generally
accepted accounting principles (GAAP). Adjusted EBITDA is not
prepared in accordance with U.S. GAAP, as it excludes certain
items, and may not be comparable to similarly-titled measures of
other companies.
Post management uses certain non-GAAP measures,
including Adjusted EBITDA and free cash flow, as key metrics in the
evaluation of underlying Company and segment performance, in making
financial, operating and planning decisions, and, in part, in the
determination of cash bonuses for its executive officers and
employees. Post management believes the use of non-GAAP measures,
including Adjusted EBITDA and free cash flow, provides increased
transparency and assists investors in understanding the underlying
operating performance of Post and its segments and in the analysis
of ongoing operating trends.
Because Post discusses Adjusted EBITDA and/or free
cash flow in this release only in relation to Post's fiscal 2017
Adjusted EBITDA guidance and management's expectations of the
future effect of the Bob Evans transaction on these non-GAAP
measures, Post has not, for the reasons discussed above, provided a
reconciliation of its forward-looking Adjusted EBITDA and free cash
flow expectations to the mostly directly comparable GAAP
measures.
Prospective Financial
Information
Prospective financial information is necessarily
speculative in nature, and it can be expected that some or all of
the assumptions underlying the prospective financial information
described above will not materialize or will vary significantly
from actual results. For further discussion of some of the factors
that may cause actual results to vary materially from the
information provided above see "Forward-Looking Statements" below.
Accordingly, the prospective financial information provided above
is only an estimate of what Post management believes is realizable
as of the date of this press release. It should also be recognized
that the reliability of any forecasted financial data diminishes
the farther in the future that the data is forecast. In light of
the foregoing, the information should be viewed in context and
undue reliance should not be placed upon it.
Cautionary Statement
Regarding Forward Looking Statements
Certain matters discussed in this press release
are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are made based on known events and circumstances at the
time of release, and as such, are subject to uncertainty and
changes in circumstances. These forward-looking statements include,
among others, statements regarding Post's fiscal 2017 Adjusted
EBITDA guidance range, expected synergies and benefits of the
acquisition of Bob Evans, expected sources of financing,
expectations about future business plans, prospective performance
and opportunities, stockholder and regulatory approvals and the
expected timing of completion of the transaction. These statements
may be identified from the use of forward-looking terminology such
as "anticipates," "believes," "may," "should," "could,"
"potential," "continues," "plans," "forecasts," "estimates,"
"projects," "predicts," "would," "intends," "anticipates,"
"expects," "targets," "is likely," "will," or the negative of these
terms and similar expressions, and include all statements regarding
future performance, earnings projections, events or developments.
There is no assurance that the acquisition of Bob Evans by Post
will be consummated and there are a number of risks and
uncertainties that could cause actual results to differ materially
from the forward-looking statements made herein. These risks and
uncertainties include, but are not limited to, the following:
- the occurrence of any event, change
or other circumstances that could delay the closing of the proposed
transaction;
- the possibility of non-consummation
of the proposed transaction and termination of the merger
agreement;
- the ability and timing to obtain the
approval of Bob Evans' stockholders and required regulatory
approvals and to satisfy other closing conditions to the merger
agreement;
- the risk that stockholder litigation
in connection with the proposed transaction may affect the timing
or occurrence of the proposed transaction or result in significant
costs of defense, indemnification and liability;
- adverse effects on Post's common
stock or Bob Evans' common stock because of the failure to complete
the proposed transaction;
- Post's or Bob Evans' respective
businesses experiencing disruptions from ongoing business
operations due to transaction-related uncertainty or other factors
making it more difficult than expected to maintain relationships
with employees, business partners or governmental entities, both
before and following consummation of the transaction;
- Post and Bob Evans being unable to
promptly and effectively implement integration strategies and
obtain expected cost savings and synergies within the expected
timeframe;
- Post's ability to retain certain key
employees at Bob Evans;
- significant transaction costs which
have been and may continue to be incurred related to the proposed
transaction;
- Post's high leverage, Post's ability
to obtain additional financing (including both secured and
unsecured debt), and Post's ability to service its outstanding debt
(including covenants that restrict the operation of its
business);
- Post's ability to promptly and
effectively integrate the Weetabix business and obtain expected
cost savings and synergies within the expected timeframe;
- Post's ability to continue to
compete in its product markets and its ability to retain its market
position;
- Post's ability to anticipate and
respond to changes in consumer preferences and trends and introduce
new products;
- Post's ability to identify, complete
and integrate acquisitions and manage its growth;
- changes in Post's or Bob Evans'
management, financing and business operations;
- significant volatility in the costs
of certain raw materials, commodities, packaging or energy used to
manufacture Post's or Bob Evans' products;
- impairment in the carrying value of
goodwill or other intangibles;
- Post's or Bob Evans' ability to
successfully implement business strategies to reduce costs;
- Post's or Bob Evans' ability to
comply with increased regulatory scrutiny related to certain of
their respective products and/or international sales;
- allegations that Post's or Bob
Evans' products cause injury or illness, product recalls and
product liability claims and other litigation;
- legal and regulatory factors,
including advertising and labeling laws, changes in food safety and
laws and regulations governing animal feeding and housing
operations;
- the ultimate impact litigation may
have on Post or Bob Evans;
- the loss or bankruptcy of a
significant customer;
- consolidations in the retail grocery
and foodservice industries;
- the ability of Post's private label
products to compete with nationally branded products;
- disruptions or inefficiencies in
supply chain;
- Post's or Bob Evans' reliance on
third party manufacturers for certain of their respective
products;
- changes in economic conditions,
disruptions in the U.S. and global capital and credit markets, and
fluctuations in foreign currency exchange rates;
- changes in estimates in critical
accounting judgments and changes to or new laws and regulations
affecting Post's or Bob Evans' business;
- the impact of the United Kingdom's
exit from the European Union (commonly known as "Brexit") on Post
or Bob Evans and their respective operations;
- changes in weather conditions,
natural disasters, disease outbreaks and other events beyond Post's
or Bob Evans' control;
- loss of key employees, labor
strikes, work stoppages or unionization efforts;
- losses or increased funding and
expenses related to Post's or Bob Evans' qualified pension and
other post-retirement plans;
- business disruptions caused by
information technology failures and/or technology hacking;
- Post's or Bob Evans' ability to
protect their respective intellectual property and other
assets;
- Post's ability to successfully
operate its international operations in compliance with applicable
laws and regulations;
- significant differences in Post's or
Bob Evans' actual operating results from their respective guidance
regarding their respective future performance;
- Post's or Bob Evans' ability to
satisfy the requirements of Section 404 of the Sarbanes-Oxley Act
of 2002, including with respect to acquired businesses; and
- other risks and uncertainties
described in Post's and Bob Evans' filings with the Securities and
Exchange Commission.
Post and Bob Evans caution readers not to place
undue reliance on any forward-looking statements. These
forward-looking statements represent Post's and Bob Evans' judgment
as of the date of this release, and Post and Bob Evans undertake no
obligation to update or revise them unless otherwise required by
law.
Additional Information and
Where to Find It
In connection with the proposed merger, Bob Evans
intends to file a preliminary proxy statement on Schedule 14A with
the Securities and Exchange Commission (the "SEC"). BOB EVANS
STOCKHOLDERS ARE URGED TO READ THE PRELIMINARY PROXY STATEMENT AND
ANY OTHER RELEVANT DOCUMENTS, INCLUDING ANY DEFINITIVE PROXY
STATEMENT, FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN
THEY BECOME AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT
DECISION WITH RESPECT TO THE PROPOSED MERGER BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. The
definitive proxy statement will be mailed to stockholders of Bob
Evans. Investors and security holders will be able to obtain the
documents (when they become available) free of charge at the SEC's
website, http://www.sec.gov. In addition, stockholders may
obtain free copies of the documents (when they become available) at
the Bob Evans website, www.bobevansgrocery.com, under the
heading "Investors."
Participants in the
Solicitation
Bob Evans, Post and their respective directors and
executive officers and other members of management and employees
may be deemed to be participants in the solicitation of proxies
from the stockholders of Bob Evans in connection with the proposed
merger. Information regarding Post's directors and executive
officers is included in Post's Annual Report on Form 10-K for the
year ended September 30, 2016, filed with the SEC on November 18,
2016 and the proxy statement for Post's 2017 Annual Meeting of
Shareholders, filed with the SEC on December 8, 2016. Information
regarding Bob Evans' directors and executive officers is included
in the Bob Evans Annual Report on Form 10-K for the fiscal year
ended April 28, 2017, filed with the SEC on June 15, 2017 and the
proxy statement for Bob Evans' 2017 Annual Meeting of Stockholders,
filed with the SEC on July 14, 2017. Additional information
regarding the interests of such participants in the solicitation of
proxies in respect of the proposed merger will be included in the
proxy statement and other relevant materials to be filed with the
SEC when they become available.
About Post Holdings,
Inc.
Post Holdings, Inc., headquartered in St. Louis,
Missouri, is a consumer packaged goods holding company operating in
the center-of-the-store, foodservice, food ingredient, private
label, refrigerated and active nutrition food categories. Through
its Post Consumer Brands business, Post is a leader in the North
American ready-to-eat cereal category and offers a broad portfolio
that includes recognized brands such as Honey Bunches of Oats®,
Pebbles(TM), Great Grains® and Malt-O-Meal® bag cereal as well as
granola and hot wheat products. Post is also a leader in the United
Kingdom ready-to-eat cereal category with Weetabix® and Alpen®.
Post's Michael Foods Group supplies value-added egg products,
refrigerated potato products, cheese and other dairy case products
and dry pasta products to the foodservice, food ingredient and
private label retail channels and markets retail brands including
All Whites®, Better'n Eggs®, Simply Potatoes® and Crystal Farms®.
Post's Active Nutrition platform aids consumers in adopting
healthier lifestyles through brands such as Premier Protein®,
PowerBar® and Dymatize®. Post's Private Brands Group manufactures
private label peanut butter and other nut butters, dried fruits and
baking and snacking nuts. For more information, visit
www.postholdings.com.
About Bob Evans Farms,
Inc.
Bob Evans Farms, Inc. is a leading producer and
distributor of refrigerated potato, pasta and vegetable-based side
dishes, pork sausage, and a variety of refrigerated and frozen
convenience food items under the Bob Evans and Owens brand names.
For more information about Bob Evans Farms, Inc., visit
www.bobevansgrocery.com.
BOBE-G
Post Investor Relations Contact:
Brad Harper
(314) 644-7626
brad.harper@postholdings.com
Bob Evans Investor Relations Contact:
Scott Van Winkle
(617) 956-6736
scott.vanwinkle@icrinc.com
Bob Evans Media Relations Contact:
Elizabeth Sedlock
(636) 699-9554
esedlock@sedlockpartners.com
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Post Holdings, Inc. via Globenewswire
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