M&A Deal # 2 — Post
Bill Stiritz is one of my favorite CEOs of all time. While most people his age (he’s 80) are retired and playing golf or something, Stiritz is busy building another company. Since Ralcorp spun off Post Holdings (POST) in 2012, Stiritz has been busy transforming the cereal maker into more than just a purveyor of Raisin Bran.
His vision is to build a diversified food business that can compete with the big boys like General Mills (GIS) and Kellogg (K). Detractors suggest the $4 billion in acquisitions he’s made over the past 12 months don’t follow any kind of coherent strategy, that’s he’s simply piling up the debt with no end game in sight.
That might be true for other executives, but Stiritz has made a career out of mystifying so-called experts while making shareholders (and himself) very wealthy. As Stiritz himself suggests, “Post isn’t in the game for small change … It’s hard to judge transformation midstream … this is not the first time outsiders have questioned my moves.”
While I’d love to see POST pull off a massive acquisition such as buying Hain Celestial Group (HAIN), the debt incurred to do this M&A magic trick would be too onerous even for a man as bright as Stiritz.
In light of this, I suspect that Annie’s (BNNY), the California-based maker of healthier food products, is a very real M&A candidate for the company. When it went public in March 2012, Annie’s came out of the gate like a horse on fire with BNNY stock rising 89% in its first day of trading. Since then, it’s down 16% through July 30.
Recently, the CNBC show Fast Money highlighted the reasons why Annie’s would be a great bolt-on acquisition for larger food companies. This type of business that’s struggling with growth would benefit greatly from Stiritz’s leadership. Look for it to happen.