Milling & Baking News Corporate Profiles - October 2012 - (Page 114)

Company Overview Ralcorp Holdings, Inc. Creation of center store private brand business initiated he past year was one of significant change for St. Louis-based Ralcorp Holdings, Inc. First, the company in early February completed the separation of its Post cereals business by distributing at least 80% of its outstanding shares of Post common stock to holders of Ralcorp common stock as of the close of business on Jan. 30. Each shareholder received one share of Post common stock for every two shares of Ralcorp common stock held on Jan. 30. In connection with the transactions, Ralcorp received $775 million and expects to receive an additional $125 million, which the company said will be used “to reduce debt, aggressively pursue privatebrand acquisitions and pursue additional share repurchases under the company’s remaining share repurchase authorization of approximately ﬁve million shares.” True to its word, Ralcorp wasted little time on the acquisition front, buying Petri Baking Products, Inc., a Silver Creek, N.Y.based producer of private label wire-cut cookies, in May, and Gelit S.r.l., a producer of private label frozen meals in Italy, in June. Then in August, Ralcorp unveiled a strategic restructuring centered around a new, center store private brand food business. Details about the new business, which will be led by Richard R. Koulouris, currently corporate vice-president and president of Ralcorp Snacks, Sauces and Spreads, were shared by Kevin Hunt, president and chief executive ofﬁcer, in an Aug. 8 conference call. The new business currently exists as three separate segments within Ralcorp, beginning with the company’s legacy private brand ready-to-eat and hot cereal business. The second unit is Snacks, Sauces and Spreads, which Mr. Hunt said was Chief executive ofﬁcer – Kevin Hunt T created through 16 acquisitions and integrations and competes in 14 different categories. Less than a year ago, the division completed a consolidation of ﬁve different sub-segment headquarters into the company’s St. Louis headquarters, and currently operates with a single, central sales, marketing, operations and ﬁnance team. The ﬁnal segment in the new business is the pasta unit, acquired in July 2010 with the purchase of American Italian Pasta Co. Explaining the strategic rationale for the move, Mr. Hunt said the dry grocery private brand business will have $3 billion in annual sales “with superior scale and capability.” He said the business competes in 22 different categories and holds top two share positions in 18 of these. “We possess signiﬁcant category knowledge and value-added capabilities, and we’ll effectively utilize the category management tools and consumer insights data that are critical to helping our customers grow,” Mr. Hunt said. “We will also have an unmatched private brand national supply chain. This new organization will allow us to take full advantage of our scale resulting in a leaner organization that will have one set of processes across all functions, including sales, marketing, customer service, research and development, logistics and operations.” Beyond the consolidation’s strategic beneﬁts, Mr. Hunt said it will generate signiﬁcant cost savings — between $26 million and $31 million in ﬁscal 2013 with incremental savings the following year. The move is expected to lead to $17 million to $22 million of one-time expenses related to employee separation and related expenses. Half of these costs will be recorded in the current ﬁscal year with the balance in ﬁscal 2013, Mr. Hunt said. CP 2011 global sales — $4.7 billion Top brands – (Primarily a private label food maker) Ronco Heartland 114 \ October 2012 Milling & Baking News • Food Business News • Baking & Snack • Meat & Poultry Corporate Proﬁles

Table of Contents for the Digital Edition of Milling & Baking News Corporate Profiles - October 2012

Milling & Baking News Corporate Profiles - October 2012