ST. LOUIS - Cereal maker Post Holdings Inc. is buying fellow packaged food maker Michael Foods Inc. in a $2.45 billion deal that will expand Post's range of products.
Privately held Michael Foods makes a variety of egg, potato and dairy products. Its brands include Papetti's, Crystal Farms and Simply Potatoes. It is based in Minnetonka, Minnesota.
St. Louis-based Post says Michael will keep operating independently under current management.
Post also makes nutrition drinks and a variety of store brand products including pasta and peanut butter.
Post plans to fund the acquisition with debt and cash on hand. It also plans to raise up to $500 million with a stock sale.
Michael Foods is owned by an investor group that includes GS Capital Partners, Thomas H. Lee Partners and members of the company's management.