Ralcorp Completes Acquisition of Sara Lee's Private Brand Dough Business

The refrigerated dough business will become a key part of our frozen bakery division and will enhance Ralcorp's bakery product offerings.

Oct 4 2011 --- Ralcorp Holdings, Inc. announced that it has completed its acquisition of the North American private brand refrigerated dough business of Sara Lee Corporation.

"We are pleased to complete this transaction, which enhances Ralcorp's private-brand offerings and immediately positions Ralcorp as a leader in the $1.8 billion refrigerated dough category," said Kevin J. Hunt, Co-CEO and President of Ralcorp. "The acquisition of this cash generating refrigerated dough business will make important contributions to Ralcorp's earnings following the planned separation of the Post cereals business and represents the continuation of our strategy of enhancing shareholder value through private-brand acquisitions. We welcome the refrigerated dough business' management team and employees to the Ralcorp family. The refrigerated dough business will become a key part of our frozen bakery division and will enhance Ralcorp's bakery product offerings. We look forward to providing our customers with the high-quality service and products they have come to expect from Ralcorp."

The refrigerated dough business is a leading manufacturer and distributor of a full range of private brand refrigerated dough products in the U.S. The acquisition is expected to be accretive on a GAAP basis by over $0.30 per share in year one, including synergies but excluding one-time acquisition related expenses. On a cash basis, Ralcorp expects accretion to be $0.50 per share during the first year. The acquisition is also expected to enhance Ralcorp's cash flow and generate operational synergies of approximately $6 million to $8 million annually after the third year post-closing, excluding one-time transition costs.

To fund the $545 million transaction, Ralcorp has entered into a short-term financing arrangement that is expected to be repaid with a portion of the proceeds generated by financing to be incurred in connection with the separation of its Post cereals business unit, which is on pace to be completed near year end. The refrigerated dough business employs approximately 700 people and has manufacturing and distribution facilities in Carrollton, Texas and Forest Park, Georgia. The refrigerated dough business will operate as part of a broader Ralcorp Frozen Bakery Products division.