Egg and food processor Michael Foods is reportedly in advanced talks to sell itself for an amount near $2.5 billion, with Tyson Foods and Post Holdings identified as final contenders to purchase the company. A transaction for the purchase of Michael Foods could come yet in April.
Michael Foods, which is currently owned by GS Capital Partners, a private equity affiliate of the Goldman Sachs Group, initially announced in December 2013 that it was seeking to be sold. According to a Reuters report, Michael Foods is evaluating binding bids from Tyson and Post that were submitted in early April, but has not yet determined which party it will choose as a buyer.
Both Tyson Foods and Post Holdings have been actively acquiring other food companies.
Tyson Foods has a practice to not comment on acquisition rumors, but during a November 2013 quarterly conference call with shareholders, Tyson Foods CEO Donnie Smith said the company is considering options to further grow its business through acquisitions. Tyson Foods’ most recent acquisitions include Bosco's Pizza, and Mexican food companies Circle Foods and Don Julio Foods.
Post Holdings, best known for its lines of breakfast cereals, has recently purchased peanut butter maker Golden Boy Foods, pasta company Dakota Growers Pasta, sports nutrition brand PowerBar, protein bar maker Dymatize Enterprises, and protein company Premier Nutrition Corp.
Other parties identified as previous potential buyers for Michael Foods included TreeHouse Foods, Clayton Dubilier & Rice LLC, Golden Gate Capital and Oaktree Capital Management.
GS Capital Partners purchased Michael Foods in 2013 for $1.7 billion from Thomas H. Lee Partners. Michael Foods’ operation includes 11.3 million laying hens and has an annual revenue of $1.7 billion.