Cereal maker Post Holdings Inc. (NYSE: POST) is set to purchase Dakota Growers Pasta Co. for $370 million as a means of diversifying its food offerings.
The St. Louis, Mo.-based company — maker of Honey Bunches of Oats, Pebbles, Shredded Wheat, Raisin Bran — agreed to buy the unit from Glencore Xstrata plc (LON: GLEN). The move comes on the heels of Switzerland-based Glencore’s $6.2 billion acquisition of Viterra Inc. in late 2012. It has since been attempting to sell off some of the subsidiaries that came with the takeover, including Dakota Growers.
Viterra, a Canadian grain business, bought Dakota Growers in March 2010.
According to a statement, the Carrington, N.D.-based pasta maker will add roughly $300 million to Post sales and about $46 million in Ebitda.
“Post continues to expand its portfolio into segments of the overall food industry where it sees opportunities to grow and diversify its strong cash flow,” says chief executive Bill Stiritz in a statement.
The Dakota Growers transaction is expected to be completed in January 2014.