Post to buy West Coast fruit/nut processor

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Aiming to claim market share in the private-label food business, the maker of Shreddies, Grape-Nuts and Cranberry Almond Crunch cereals has bought a major B.C. processor of dried fruits, trail mixes and nut butters.

St. Louis, Mo.-based Post Foods announced Monday it will buy Golden Boy Foods of Burnaby, B.C. for C$320 million, in a deal expected to close by Feb. 1, 2014, pending U.S. and Canadian antitrust regulators’ approvals.

Post said it then plans to combine the Golden Boy business with Dakota Growers Pasta Co. when its previously-announced deal to buy the latter company is completed.

Post announced in September it will buy Dakota Growers from the Viterra arm of Glencore Xstrata for US$370 million, in a deal now expected to close sometime next month. Dakota Growers makes pasta ingredients for other food companies and for the foodservice and private-label retail sectors.

The combined Golden Boy and Dakota Growers businesses, Post said Monday, are to be managed by Golden Boy CEO Richard Harris.

Post — which spun off from General Foods last year as an independent publicly-traded company — said the two companies are expected to establish its private label platform, a business with expected annual net sales of over US$500 million for the 12 months ending Sept. 30.

“Consolidation opportunities”

Golden Boy, launched in 1979 as a family-owned business marketing dried fruits and roasted and raw nuts, has been owned since 2007 by Vancouver private equity firm Tricor Pacific Capital, along with members of Golden Boy’s management.

Golden Boy’s business segments include its Burnaby-based fruit and nut division, and its peanut and tree nut butter wing headquartered at Markham, Ont. It also processes and packages dry goods such as rice, beans, lentils, barley, flours and tapioca for retailers’ private labels and for bulk customers.

The nut butter business, which produces both conventional and organic peanut butters and other nut butters, operates two plants in Ontario, at Brampton and Markham, and two U.S. plants, at Blaine, Washington (just south of White Rock, B.C.) and Troy, Alabama (about 70 km south of Montgomery).

“Active nutrition and private-label are exciting categories with organic growth and consolidation opportunities,” said Post CEO William Stiritz, who on Monday also announced Post will buy Texas-based protein supplement and protein bar maker Dymatize Enterprises for US$380 million.

Golden Boy, Post said, is “a key supplier to the U.S. and Canadian retail and foodservice channels and participates in the rapidly growing organic packaged foods category.”

Post said it expects the nut butter category to remain “strong,” with the U.S. nut butter retail category projected to grow at a compound annual growth rate of 13 per cent between 2014 and 2017, and that Golden Boy “is well positioned to participate in this category growth” with a “flexible production and distribution network.”

Privately-held Golden Boy has so far booked net sales of C$164 million and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $23 million for the nine months ending Sept. 30, Post said. – AGCanada.com Network

Related story:
Cereal maker Post to buy Viterra’s U.S. pasta firm, Sept. 16, 2013