Ralcorp Buys American Italian Pasta, Lowers Guidance
Ralcorp, which sells a variety of frozen foods, sauces, cereal and snack products, under the Post brand name as well as private labels, wants to expand its presence in the North American pasta market.
Ralcorp said the transaction, which is expected to close during Ralcorp's fourth fiscal quarter ending Sept. 30, is expected to result in an earnings per share increase of at least 50 cents for fiscal 2010.
"We anticipate that by adding AIPC's No. 1 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," President and Co-CEO Kevin J. Hunt said in a statement.
Ralcorp also said it bought privately held Canadian cracker companies, North American Baking and JT Bakeries, for an undisclosed amount to enhance its premium and gourmet cracker offerings. Ralcorp anticipates the transactions will be slightly accretive during the remainder of its 2010 fiscal year.
In addition to all the transactions, Ralcorp announced it expects to earn $1 a share in the third quarter, which is well below the $1.31 it earned last year and significantly lower than analysts' average estimate of $1.29 a share, according to Thomson Reuters. Ralcorp also said it does not plan to provide earnings guidance in the future. Ralcorp shares slid more than 5% on the news.