Post Holdings Inc. will spend $1.15 billion to bulk up its presence in the cereal aisle by buying privately held MOM Brands Co., maker of Malt-O-Meal cereals.
Post said Monday that it would pay $1.05 billion in cash and give MOM Brands' owners nearly 2.5 million shares of stock for the acquisition, which is expected to be completed in the third quarter.
MOM Brands' product portfolio includes branded, ready-to-eat cereals as well as hot wheat and oatmeal products. Its cereals include Golden Puffs, Frosted Mini Spooners and Cinnamon Toasters, which are similar to cereals made by competitors but generally sold in bags at lower prices. The company is based in Lakeville, Minn.
The deal comes at a tough time for the cereal business because more people are looking for breakfasts they can eat on the go or are avoiding carbohydrates or gluten in favor of protein.
Post has been on an acquisition spree lately to diversify, adding the PowerBar and Musashi nutrition brands, which it purchased from Nestle, and the peanut butter maker American Blanching Co.
Last June, the St. Louis company completed a $2.45-billion acquisition of fellow packaged food maker Michael Foods Inc.
Post plans to finance most of the MOM Brands deal and sell about $240 million in stock.
Post also makes nutrition drinks and a variety of store-brand products including pasta. It said Monday that it expects about $1.07 billion in revenue for the quarter that ended Dec. 31. That forecast matched Wall Street expectations, according to the data firm FactSet.
Shares of Post Holdings jumped $7.39, or 17.3%, to $48.83.