Post Holdings, Inc. POST has been committed to strengthening its portfolio through prudent acquisitions. Keeping along these lines, this prominent consumer packaged goods holding company stated that it has agreed to take over Potato Products of Idaho, L.L.C. (PPI), signaling its entry into the refrigerated and frozen potato market. The deal is expected to close in the first calendar quarter of 2025, corresponding to POST’s second quarter of fiscal 2025.

While financial details remain undisclosed, the acquisition is a calculated move aimed at strengthening Post Holdings’ product portfolio and operational capabilities in a growing market. It looks like the company is aiming to expand in the potato products space, as exemplified by recent reports suggesting POST is showing interest in acquiring Lamb Weston Holdings LW. 

That said, the acquisition of PPI, which comprises a manufacturing facility in Rigby, ID, aligns with Post Holdings’ goal of enhancing its supply chain and production capabilities. By diversifying into value-added potato products, the company taps into a category witnessing strong demand driven by consumer preferences for convenient and versatile meal options.

POST Price Performance vs. Industry

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Post Holdings Fuels Growth via Acquisitions

Post Holdings has been benefiting from its focus on acquisitions, which has been helping it expand its customer base. In December 2023, the company acquired Perfection Pet Foods, which forms part of the Post Consumer Brands segment and contributed $67 million in sales during the fourth quarter of fiscal 2024. In December 2023, the company acquired Deeside Cereals to form part of its Weetabix segment.

On April 28, 2023, Post Holdings acquired a select pet food brand from The J.M. Smucker Co. SJM, providing it a solid entry point into the lucrative pet food category. Some other notable acquisitions by the company include Lacka Foods Limited (April 2022), PL RTE Cereal Business (June 2021), Almark Foods (February 2021) and Conagra’s CAG Peter Pan peanut butter brand (January 2021). These acquisitions support Post Holdings’ growth strategy, allowing the company to expand its brand lineup and product offerings.

Wrapping Up

Post Holdings’ acquisition of Potato Products of Idaho reflects a strategic push into a high-demand market segment with significant implications for its growth trajectory. While the transaction is expected to close in early 2025, all eyes remain on Post Holdings’ broader plans, including the rumored pursuit of Lamb Weston.

For now, the PPI deal underscores Post Holdings’ commitment to diversifying its portfolio and enhancing its operational footprint. Shares of this Zacks Rank #3 (Hold) company have rallied 31.3% year to date, against the industry’s decline of 3.4%.  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Conagra Brands (CAG) : Free Stock Analysis Report

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Lamb Weston (LW) : Free Stock Analysis Report

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