June 21, 2010
Ralcorp Holdings is purchasing American Italian Pasta Company (AIPC) for $1.2 billion in stock, or $53 a share, a deal that further deepens the company’s store brand food holdings.
Ralcorp, which sells cereals, corn snack products, syrups and salad dressings, said the deal will be funded through a combination of cash on hand, borrowings under existing credit facilities, a bridge facility for which it has received a commitment letter or other debt or equity arrangements. The deal, which is slated to close Sept. 30, is subject to regulatory approvals.
AIPC is a leading producer of dry pasta in North America, operating four manufacturing plants and employing approximately 650. In addition to its store brands manufacturing, AIPC makes regional pasta brands such as Mueller’s and Golden Grain.
Ralcorp Co-CEOs Kevin Hunt (left) and David Skarie.
"This transaction strengthens our position as a diversified provider of private label and branded food products, and 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," said Kevin J. Hunt, co-CEO and president of Ralcorp.
David P. Skarie, co-CEO and president of Ralcorp said: "We expect AIPC's workforce to be an important part of Ralcorp's continued growth and success and we intend to continue to invest in the combined business for sustainable and profitable growth."
When the deal is completed, AIPC will become a wholly-owned subsidiary and will operate as an independent division of Ralcorp, reporting to Hunt, who oversees the company's existing snacks, sauces and spreads and frozen bakery products businesses, Ralcorp said in a statement.
“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 Jack P. Kelly, president and CEO of AIPC. We look forward to working closely with the Ralcorp team to complete the transaction as expeditiously as possible and to ensure a smooth transition."
In 2009, AIPC posted $88 million in profit compared to $19 million in 2008, and sales rose to $628 million last year, up 10 percent from prior year, according to a Reuter’s report.
1 comment:
Italian pasta has the greatest variety of size, shape and preparation. Each region of Italy has its own way favored, preparation, and the recipe. Classic Italian pasta dishes are cooked around the world now. Macaroni and spaghetti in Asia are most preferred in the context of Western-style cuisine. The Japanese preferred the approach of Naples and Bologna to prepare the pasta on top. In Latin America, almost all varieties are found mainly in places where many people have Italian ancestry. Also served with the native cuisine as köttfärssås Sweden.
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