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BULLETIN: RALCORP TO BUY SARA LEE PL REFRIGERATED DOUGH BUSINESS

August 9, 2011
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Ralcorp Holdings announced early this morning that it would be buying Sara Lee's private label refrigerated dough business. The move appears to be Ralcorp's latest in its ongoing corporate chess battle with ConAgra which wants to buy the St. Louis-based private label cereal and pasta maker.



Ralcorp Holdings announced early this morning that it would be buying Sara Lee's private label refrigerated dough business. The move appears to be Ralcorp's latest in its ongoing corporate chess battle with ConAgra which wants to buy the St. Louis-based private label cereal and pasta maker.
 
Ralcorp will pay roughly $545 million for the Sara Lee refrigerated dough business, which had net sales of more than $300 million for the fiscal year ending in July 2010, Ralcorp says.

 
"This transaction will allow Ralcorp to be a private-brand leader in the $1.8 billion refrigerated dough category,” said Kevin J. Hunt, Co-CEO and President of Ralcorp. “Given its higher margins and free cash flow, we expect this acquisition to result in the creation of significant value for Ralcorp shareholders. The percentage impact of this accretion will be even more significant after the Post Foods separation, as our private-brand earnings base will be smaller."

 
Ralcorp announced July 14 that it plans to spin off Post Foods to shareholders. The decision was seen as an attempt to forestall a takeover by ConAgra, which on May 4 announced a $4.9 billion bid for Ralcorp.

 
Sara Lee’s refrigerated dough business has roughly 700 employs and facilities in Carrollton, Texas and Forest Park, Ga. Upon completion of the deal, the unit will operate as part of the Ralcorp Frozen Bakery Products division.

Ralcorp intends to fund the transaction with short-term debt that will be repaid with the $1 billion it expects to get from the Post Foods spin-off.

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