Post Holdings Inc., St. Louis, announced today (Sept. 19) an agreement to acquire Bob Evans Farms Inc., New Albany, Ohio, for approximately $1.5 billion. The deal will move the acquirer deeper into the breakfast category, beyond Post's cereals and eggs, and especially into packaged and prepared breakfast entrees. Post officials called it a "highly complementary combination."
Bob Evans has been around since 1948, but primarily as a breakfast-oriented restaurant chain. But in January, after months of pressure from activist investors, it sold that half of the company to investment firm Golden Gate Capital, leaving only the manufacturing operations, with sales that we estimate at $400 million.
The manufacturing organization has grown, from producing simple pork sausages primarily for the restaurant chain to retail refrigerated and frozen breakfast items to refrigerated potato, pasta and vegetable-based side dishes. Brands include Bob Evans, Owens, Country Creek and Pineland Farms. It also has a growing foodservice business, representing approximately 35 percent of volume. Manufacturing facilities are in Hillsdale, Mich.; Xenia, Ohio; Sulphur Springs, Texas; Lima, Ohio; and Mars Hill, Maine.
Upon closing, Bob Evans will be combined with Post's existing refrigerated retail egg, potato and cheese business to create a refrigerated retail business, which will be led by Mike Townsley, Bob Evans’ current president/CEO. Jim Dwyer will continue in his current role as president/CEO of the Michael Foods Group, managing the commercial foodservice egg, potato and pasta businesses, which will include the Bob Evans foodservice business.