Ralcorp is buying pasta, cracker companies
Ralcorp is buying pasta, cracker companies
Ralcorp is buying pasta, cracker companies
Food maker Ralcorp said Monday it has agreed to buy American Italian Pasta for about $1.2 billion and has acquired two cracker makers.
But the maker of Post cereals and store-branded products also offered third-quarter guidance below expectations due to tough competition in the cereal category.
Ralcorp says it will pay $53 per share for American Italian Pasta. That is a 27% premium over the Kansas City pasta maker's closing price of $41.73 on Friday.
Ralcorp also says it acquired North American Baking, a Canadian maker of private-label specialty crackers, and J.T. Bakeries, which also makes crackers.
Meanwhile, Ralcorp forecast a drop in fiscal third-quarter net income to $1 a share, down $1.31 per share in the prior year. Analysts expect a profit of $1.29 per share.
The deal for American Italian Pasta is expected to close during Ralcorp's fiscal fourth-quarter ending Sept. 30.
Ralcorp will fund the deal through a cash on hand, existing credit facilities and a bridge facility that it has received a commitment letter for, or other debt or equity arrangements.
Ralcorp said it expects the deal to help earnings by at least 50 cents per share, excluding one-time items, in 2010.
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