ConAgra Foods Inc.
), a leading food company, successfully acquired Ralcorp Holdings
Inc., a branded food company for approximately $6.8 billion,
including debt or $90.00 per share in cash.
The acquisition, agreed upon on Nov 26, 2012, received
regulatory approvals and Ralcorp shareholders' sanction and came
to a close on Jan 29, 2013. The acquisition was agreed upon on
Nov 26, 2012, for $90.0 per share in cash of Ralcorp's common
shares. The price per share implies a 28.2% premium on Ralcorp's
closing share price on November 26.
Subsequent to the acquisition, ConAgra becomes the market
leader in packaged foods industry with roughly $18.0 billion in
sales annually. Ralcorp posted annual sales of $4.3 billion in
fiscal 2012 (ended Sep 2012), compared with ConAgra's $13.3
billion during its fiscal year 2012 (ended May 2012). The
company's employee strength will increase to over 36,000
Ralcorp offers a variety of branded foods like cereal, pasta,
crackers, jellies and jams, syrups, frozen waffles, combined with
meals, entrées, condiments, sides, snacks, and desserts. This
reinforces management's belief that the total private label
business would be worth around $4.5 billion annually. The
synergistic benefits are likely to be great as ConAgra lacks a
significant presence in the markets where Ralcorp primarily
As previously announced, ConAgra is expected to derive cost
synergies of about $225 million per year from the acquisition.
The acquisition is sponsored through ConAgra's existing cash,
credit facilities as well as new borrowings.
Based in North America, ConAgra is a leader in the branded and
value-added foods industry. The stock currently holds a Zacks
Rank #2 (Buy). Other stocks worth a look in the industry are
B&G Foods Inc.
Flowers Foods Inc.
); each bearing a Zacks Rank #1 (Strong Buy).
B&G FOODS CL-A (BGS): Free Stock Analysis
CONAGRA FOODS (CAG): Free Stock Analysis
FLOWERS FOODS (FLO): Free Stock Analysis
INGREDION INC (INGR): Free Stock Analysis
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