Post Holdings Launches $400M SPAC Targeting Consumer Sector

In the first of what could be a growing trend, a publicly-traded company is launching a special-purpose acquisition company to bring a private company public under a separate ownership structure.

The SPAC: Post Holdings Inc POST is launching Post Holdings Partnering Corporation, a SPAC that will target the consumer sector.

The SPAC is seeking to raise $400 million by selling 40 million units. Each unit will include a common share and one fifth of a warrant. No ticker was listed in the filing. 

The management team of the SPAC includes several members from Post Holdings including the current CEO Rob Vitale serving as the President and Chief Investment Officer of the SPAC. 

Outside of the Post members on the SPAC team, Jennifer Kuperman formerly of Alibaba Group Holding BABA and Dave Peacock, the current President of Schnucks’ Market.

The unique part of the deal could be that Post Holdings, the existing food company, will be granted founder shares in the SPAC and the ability to purchase additional units at $10. Accelerate’s Julian Klymochko pointed out that this is a $100 million profit opportunity for the company.

“Sell-side analysts need to model that for Q4 eps estimates, which should go up meaningfully,” Klymochko said in a tweet.

Related Link: Stock Wars: General Mills Vs. Kellogg Vs. Post

About Post Holdings: The consumer packaged goods company was spun off from Ralcorp Holdings in 2012.

Since the spinoff, shares of Post Holdings went up 278% through the end of 2020. This was the best return amongst the peer group for Post Holdings.

The company was a ready to eat cereal company generating $968 million in revenue in 2011 when it became a standalone business. Post Holdings is now a $6.6-billion company by revenue.

Post Holdings has completed 16 acquisitions ranging from $100 million to $2.5 billion in size. Post Holdings has many wholly-owned brands and companies in its operations. The company also owns a 28.8% stake in BellRing Brands Inc BRBR and 60.5% stake in 8th Avenue.

SPAC Target: Post Holdings said it has a good track record of finding consumer brands. The company is seeking to find a company that can provide a good long term investment for shareholders.

Criteria include fundamental business value, attractive product category, strong margins, strategic moat and the desire to be publicly traded.