The deal will have Post Holdings Inc acquiring Bob Evans Farms Inc for $1.5 billion. This will have it paying $77 for each share of BOBE stock. This represents a 15% premium to the stock’s 30 day volume weighted average price.
Post Holdings Inc says that it will be using cash to fund the acquisition of Bob Evans Farms Inc. It notes that this will be done through a mixture of cash on-hand and borrowings from its existing revolving credit facility.
Once the transaction is complete, Post Holdings Inc is planning to combine its refrigerated retail egg, potato and cheese business with Bob Evans Farms Inc. This will establish a refrigerated retail business at the company that will be lead by current Bob Evans President and CEO Mike Townsley.
The Board of Directors for both Post Holdings Inc and Bob Evans Farms Inc have both given their approval to the deal. POST says that it is expecting BOBE to bring in adjusted EBITDA of $107 million on a yearly basis. This is before taking into account for expected cost synergies from the acquisition.
Bob Evans Farms Inc and Post Holdings Inc are expecting the deal to close during the first quarter of 2018. This will have it closing its POST’s fiscal second quarter of 2018. The deal will need approval from regulators and holders of BOBE stock before it can reach completion. It will also have to complete other customary closing conditions.
BOBE stock was up 5% as of noon Tuesday and is up 45% year-to-date.
As of this writing, William White did not hold a position in any of the aforementioned securities.