波斯特控股公司在最后时刻收购第八大道公司

Restricted - External POSTOVERWEIGHTU.S. FoodNEUTRALPrice TargetUSD 125.00Price (03-Jun-25)USD 109.21Potential Upside/Downside+14.5%Source: Bloomberg, Barclays ResearchU.S. FoodAndrew Lazar+1 212 526 4668andrew.lazar@barclays.comBCI, USJoshua Bader, CPA, CFA+1 212 526 3084joshua.bader@barclays.comBCI, USJohnny Shamir+1 212 526 0908tzur.shamir@barclays.comBCI, US been taking with its portfolio reshaping. 8th Avenue will give POST the #1 share in private labelpeanut and tree nut butter, #2 share in private label dry pasta, and #1 share in private labelgranola. In addition, the acquisition secures nut butter supply for POST's Peter Pan brand aswell as adds private label granola, an advantaged subsegment of the cereal category, to POST'salready significant branded and private label RTE cereal business. Notably, POST will nowoperate as both a branded and private label manufacturer in the cereal, nut butter, and pastacategories. We can understand some investor hesitation given past industry failures bypackaged food companies that have attempted a similar operating structure. In anefforttoavoid a similar fate, we believe POST will ringfence the commercial function and integrate thesupply chain to try to realize the best of both worlds, as well as maintain very strong SKUmanagement.From a financial perspective, POST is purchasing 8th Avenue for 7.7x pre-synergy EBITDAof $115mm or 6.8x post-synergy EBITDA of $130mm.This deal is also accretive to POST's FCF.POST will acquire 8th Avenue for ~$880mm, which reflects the assumption of $111mm offinance leases, the retirement of existing debt (which we believe to be ~$840mm), and theacquisition of the remaining preferred and common equity interests not currently owned byPOST. Interestingly, POST is essentially buying 8th Avenue for the same amount as it receivedfor contributing its assets to this venture originally, and in the interim, used the capital to buyback stock along the way, all while maintaining the same level of EBITDA. Importantly, we donot believe this acquisition impedes the company's ability to continue to buy back stock (as ithas been doing) or engage in further M&A, as the transaction only increases POST's net leveragevery modestly (from 4.5x to 4.6x). In fact, with the incremental $130mm of post-synergy EBITDA,POST will now have a larger EBITDA base upon which to leverage should a large deal come topass. Last, cost synergies are targeted at ~$15mm and POST expects to be at an annual run rateby the end of FY26. We believe a majority of these savings will come from G&A.To reflect the addition of the 8th Avenue business, POST is updating its FY25 guidancerange from $1,460-$1,500mm to $1,430-$1,470mm.This strictly reflects the three months ofownership during the current fiscal year and does not contemplate any changes to the corebusiness. With post-synergy EBITDA margins of roughly 12%, this suggests the deal would be~-150bps dilutive to PCB's segment EBITDA margin, by our estimate.2 Analyst(s) Certification(s):I, Andrew Lazar, hereby certify (1) that the views expressed in this research report accurately reflect my personal views about any or all of the subjectsecurities or issuers referred to in this research report and (2) no part of my compensation was, is or will be directly or indirectly related to the specificrecommendations or views expressed in this research report.Important Disclosures:Barclays Research is produced by the Investment Bank of Barclays Bank PLC and itsaffiliates(collectively and each individually, "Barclays"). Allauthors contributing to this research report are Research Analysts unless otherwise indicated. The publication date at the top of the report reflects thelocal time where the report was produced and maydifferfrom the release date provided in GMT.Availability of Disclosures:Where any companies are the subject of this research report, for current important disclosures regarding those companies please refer to https://publicresearch.barclays.com or alternatively send a written request to: Barclays Research Compliance, 745 Seventh Avenue, 13th Floor, New York, NY10019 or call +1-212-526-1072.The analysts responsible for preparing this research report have received compensation based upon various factors including the firm's total revenues,a portion of which is generated by investment banking activities, the profitability and revenues of the Markets business and the potential interest of thefirm's investing clients in research with respect to the asset class covered by the analyst.Analysts regularly conduct site visits to view the material operations of covered companies, but Barclays policy prohibits them from accepting paymentor reimbursement by any covered company of their travel expenses for such visits.Barclays Research Department produces various types of research including, but not limited to, fundamental analysis, equity-linked analysis,quantitative analysis, and trade ideas. Recommendations contained in one type of Barcl