US food major Post Holdings has signed terms to acquire Potato Products of Idaho (PPI), a manufacturer of refrigerated and frozen potato products.
Financial terms of the transaction were not disclosed.
The Weetabix owner’s acquisition includes a manufacturing facility in Rigby, Idaho.
Founded in 1998, PPI sources raw materials from family-owned farms and has recently upgraded its manufacturing facilities.
Its products include refrigerated and frozen mashed potatoes, caramelised sweet potatoes and MinuteBakers frozen baked potatoes.
In a note to Just Food, Mizuho Securities USA said its analysts estimate the acquisition could add approximately $15m to Post’s EBITDA, with an EBITDA margin comparable to the refrigerated & foodservice average of approximately 18%.
We maintain our outperform rating and would be unsurprised to see additional accretive M&A in FY25 given [Post] management’s characterisation of the M&A pipeline as “very deep”,” the note added.
The deal follows reports that Post has shown interest in acquiring Lamb Weston Holdings, a US-based supplier of French fries.
According to news agency Reuters, Post has hired investment bankers to explore a possible transaction.
This is not the first time Post has shown interest in Lamb Weston; previous talks reportedly stalled in 2016.
Meanwhile, Lamb Weston has been under pressure from activist investor Jana Partners, which has taken a 5% stake in the company for $336m.
After reports of Post’s interest, Jana Partners intensified its push for Lamb Weston to consider a leadership change or explore a sale.
