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Ralcorp Holdings (RAH) to Acquire American Italian Pasta Company (AIPC)

ST. LOUIS, and KANSAS CITY, Mo., June 21 /PRNewswire-FirstCall/ — Ralcorp Holdings, Inc. (NYSE: RAH) (“Ralcorp”) and American Italian Pasta Company (Nasdaq: AIPC) (“AIPC”) today announced that the Boards of Directors of both companies have unanimously approved a definitive merger agreement under which Ralcorp will acquire all of the outstanding shares of AIPC common stock for $53.00 per share in cash, for a total purchase price of approximately $1.2 billion, net of cash acquired.

Under the terms of the agreement, Ralcorp will commence a tender offer to acquire all of the outstanding shares of AIPC common stock for $53.00 per share in cash.  The transaction is expected to close during Ralcorp’s fourth fiscal quarter ending September 30, 2010 and is subject to customary closing conditions and regulatory approvals, as well as a majority of the outstanding shares of AIPC common stock being validly tendered and not withdrawn in the tender offer.  Ralcorp intends to fund the transaction through a combination of cash on hand, borrowings under existing credit facilities, a bridge facility for which it has received a commitment letter or other debt or equity arrangements.  Upon completion of the transaction, AIPC will become a wholly-owned subsidiary and will operate as an independent division of Ralcorp, reporting to Kevin J. Hunt, co-chief executive officer and president of Ralcorp, who oversees the company’s existing Snacks, Sauces and Spreads and Frozen Bakery Products businesses.

“We are excited about the addition of AIPC to the Ralcorp family,” said Mr. Hunt.  “This transaction strengthens our position as a diversified provider of private label and branded food products, and we anticipate that by adding  AIPC’s number one position in private label dry pasta, strategically-located production facilities, solid brands and top-tier customer base to Ralcorp’s capabilities, we will be able to better address a broader spectrum of customer and consumer needs.”

“We are delighted to welcome AIPC’s talented and dedicated employees to Ralcorp,” added David P. Skarie, co-chief executive officer and president of Ralcorp.  “We expect AIPC’s workforce to be an important part of Ralcorp’s continued growth and success and we intend to continue to invest in the combined business for sustainable and profitable growth.”

“This transaction with Ralcorp creates significant value for AIPC’s stockholders, customers and employees,” said Jack P. Kelly, president and chief executive officer of AIPC.  “This transaction provides immediate cash value to our stockholders at a premium that is reflective of the strength of our business.  We believe that the addition of AIPC’s products to Ralcorp will help create a stronger, more diversified company with long-term advantages for both companies’ customers and employees.  We look forward to working closely with the Ralcorp team to complete the transaction as expeditiously as possible and to ensure a smooth transition.”

Expected Benefits of the Ralcorp and AIPC Combination

The combination of Ralcorp and AIPC leverages their complementary product offerings and market strengths and unites two companies with rich traditions of delivering quality and value to their customers and consumers.  This combination is expected to result in:

  • the creation of a larger, stronger business with a diversified but complementary portfolio of high-quality private label and branded products;
  • a strong, combined financial profile, with an anticipated increase in fully diluted earnings per share of at least $0.50 for fiscal 2010, on a pro forma basis as if this transaction, as well as Ralcorp’s recent acquisitions of North American Baking Ltd. and J.T. Bakeries Ltd. had been completed as of the beginning of the fiscal year and before one-time costs associated with this transaction; and
  • a deeper understanding of private label and branded food categories, which will allow for the application of the combined expertise, knowledge and customer relationships over a broader product base.

Ralcorp has substantial experience integrating acquisitions, having completed over 20 acquisitions in the past 10 years.  Ralcorp has assembled an experienced team who will be working closely with AIPC management to plan and facilitate a successful integration of AIPC in an effort to realize the benefits inherent in this transaction.

Conference Call

Ralcorp will host a conference call today at 9:00 a.m. EDT to discuss the transaction.  For access to the call via live audio webcast, please visit the investors section of Ralcorp’s website at  Analysts and investors may access the call by dialing 1-866-610-1072; outside the U.S., dial 1-973-935-2840.

A rebroadcast will be posted as soon as it is available and will remain posted until July 5, 2010 by calling 1-800-642-1687 in the U.S. and 1-706-645-9291 outside the U.S.  The PIN number for both the conference call and the rebroadcast is 83096717.  An archive of the webcast will be posted as soon as it is available and will remain posted for 30 days in the investor relations section on Ralcorp’s website at

About Ralcorp

Ralcorp produces Post-branded cereals, a variety of value brand and store brand foods sold under the individual labels of various grocery, mass merchandise and drugstore retailers, and frozen bakery products sold to in-store bakeries, restaurants and other foodservice customers.  Ralcorp’s diversified product mix includes:  ready-to-eat and hot cereals; nutritional and cereal bars; snack mixes, corn-based chips and extruded corn snack products; crackers and cookies; snack nuts; chocolate candy; salad dressings; mayonnaise; peanut butter; jams and jellies; syrups; sauces; frozen griddle products including pancakes, waffles, and French toast; frozen biscuits and other frozen pre-baked products such as breads and muffins; and frozen dough for cookies, Danishes, bagels and doughnuts.  For more information about Ralcorp, visit the company’s website at

About American Italian Pasta Company

Founded in 1988 and based in Kansas City, Missouri, American Italian Pasta Company is a leading producer of dry pasta in North America.  AIPC has four plants that are located in Columbia, South Carolina; Excelsior Springs, Missouri; Tolleson, Arizona and Verolanuova, Italy.  AIPC has approximately 675 employees located in the United States and Italy.  For more information about AIPC, visit the company’s website at

Forward Looking Statements

This document contains forward-looking statements which are within the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.  These forward-looking statements include statements with respect to the expected timing, completion and effects of the proposed acquisition and the financial condition, results of operations, plans, objectives, future performance and business of Ralcorp and the combined company, including statements preceded by, followed by or that include the words “believes,” “projects,” “targets,” “should,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “will,” “can” or similar expressions.  These forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties.  There are a number of important factors which could cause Ralcorp’s or AIPC’s actual results to differ materially from those anticipated by the forward-looking statements.  Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements.  These factors include, but are not limited to:  (1) the ability to consummate the proposed transaction; (2) receipt of regulatory approvals without unexpected delays or conditions; (3) changes in estimates of future earnings and cash flows; (4) changes in expectations as to the closing of the transaction; (5) an increase in costs of packaging materials, ingredients, or raw materials, including durum wheat; (6) competitive pressures among branded and private label manufacturers increasing significantly; (7) general economic and business conditions that adversely affect the companies or their suppliers, distributors or customers; (8) expected synergies and cost savings are not achieved or achieved at a slower pace than expected; (9) integration problems, delays or other related costs; (10) retention of customers and critical employees; (11) the cost of capital necessary to financing the transaction; (12) unanticipated changes in laws, regulations, or other industry standards affecting the companies; and (13) those referenced in Item 1A of Ralcorp’s Annual Report on Form 10-K for the year ended September 30, 2009, under the heading “Risk Factors” or in Item 1A of AIPC’s Annual Report on Form 10-K for the year ended October 2, 2009, under the heading “Risk Factors.”

Important Information About the Tender Offer

This press release is for informational purposes only and does not constitute an offer to purchase nor a solicitation of an offer to sell any securities of AIPC.  Ralcorp has not commenced the tender offer for the shares of AIPC common stock described in this press release.  The solicitation and offer to purchase shares of AIPC common stock will only be made pursuant to a tender offer statement on Schedule TO and related exhibits, including the offer to purchase, letter of transmittal, and other related documents.

Upon commencement of the tender offer, Ralcorp will file with the SEC a tender offer statement on Schedule TO and related exhibits, including the offer to purchase, letter of transmittal, and other related documents.  In addition, AIPC will file with the SEC a tender offer solicitation/recommendation statement on Schedule 14D-9 with respect to the tender offer.  These documents will contain important information, including the terms and conditions of the tender offer.  Investors and security holders are urged to read each of these documents and any amendments to these documents carefully when they are available prior to making any decisions with respect to the tender offer.

Investors and security holders will be able to obtain free copies of these materials (when available) and other documents filed with the SEC by Ralcorp or AIPC through the web site maintained by the SEC at  In addition, Schedule TO and related exhibits, including the offer to purchase, letter of transmittal, and other related documents may be obtained (when available) for free by contacting Ralcorp at 800 Market Street, Suite 2900, St. Louis, MO 63101, (314) 877-7000 and the Schedule 14D-9 may be obtained (when available) for free by contacting AIPC at 4100 N. Mulberry Drive, Suite 200, Kansas City, Missouri 64116, (816) 584-5000.

Monday, June 21st, 2010 Uncategorized