US food group Ralcorp Holdings is to buy pasta supplier American Italian Pasta Co. in a deal worth US$1.2bn.
Ralcorp, a private-label supplier to US retailers but also owner of Post cereals, said the deal would strengthen its business across own labels and brands.
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“This transaction strengthens our position as a diversified provider of private label and branded food products,” said Ralcorp co-CEO and president Kevin Hunt.
“We anticipate that by adding AIPC’s number one position in private-label dry pasta, strategically-located production facilities, solid brands and top-tier customer base to Ralcorp’s capabilities, we will be able to better address a broader spectrum of customer and consumer needs.”
Ralcorp will offer AIPC’s shareholders $53 a share and said it expects the deal to close during its fiscal fourth quarter, which closes on 30 September.
AIPC, which in 2008 greed to pay the US government US$7.5m to settle a three-year investigation into financial malpractice at the company, said the sale of the business would benefits its investors and create a strong business.
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By GlobalData“This transaction provides immediate cash value to our stockholders at a premium that is reflective of the strength of our business. We believe that the addition of AIPC’s products to Ralcorp will help create a stronger, more diversified company with long-term advantages for both companies’ customers and employees,” said AIPC president and CEO Jack Kelly.
