Post to buy Bob Evans Farms

ST. LOUIS – Bob Evans Farms is being sold to cereal maker Post in in a deal worth about $1.53 billion.
Bob Evans makes things like refrigerated potato, pasta and frozen convenience food items under a number of brands other than Bob Evans, which will strengthen Post’s position in packaged foods. Bob Evans, founded in 1948, also has a foodservice business that sells products including sausage, sausage gravy, breakfast sandwiches and side dishes. It sold its restaurant chain to Golden Gate Capital in April.
The announcement comes at a time when consumers are increasingly moving away from packaged foods for fresher options. In August Campbell Soup said that it expected its sales to keep falling over the next year as people continue to shun packaged food items partly because of changing tastes, access to ready-to-cook meal delivery services and growing interest in fresh produce.
St. Louis-based Post Holdings Inc. – whose cereals include Fruity Pebbles, Honey Bunches of Oats and others – will pay $77 per Bob Evans share, a 5.6 percent premium to the company’s Monday closing price of $72.93.
Once the transaction closes, Post anticipates combining its existing refrigerated retail egg, potato and cheese business with Bob Evans.
The refrigerated retail business will be led by Bob Evans president and CEO Mike Townsley.
The boards of both companies have approved the sale, which is targeted to close in Post’s second quarter next year. Bob Evans’ shareholders must still sign off on the deal.