Welcome to the conference call and webcast of Post Holdings Acquisition of Rachael Ray Nutrish, Nature's Recipe, and other select pet food brands from J.M. Smucker Company. Hosting the call today from Post are Rob Vitale, President and Chief Executive Officer, and Matt Mainer, Chief Financial Officer and Treasurer. Today's call is being recorded and will be available for replay beginning at 8:00 P.M. Eastern Time. The dial-in number is 800-723-0538. No passcode is required. At this time, all participants have been placed in a listen-only mode. It is now my pleasure to turn the floor over to Jennifer Meyer, Investor Relations of Post Holdings, for introductions. You may begin. Good afternoon, and thank you for joining us on today's conference call to discuss Post's announcement of our acquisition of Rachael Ray Nutrish, Nature's Recipe, and other select pet food brands from the J.M. Smucker Company. With me today are Rob Vitale, our President and CEO, and Matt Mainer, our CFO and Treasurer. Rob will begin the call with a brief presentation, and afterwards we'll have a question-and-answer session. The press release and slides that support these remarks are posted on our website in both the Investors and the FTC Filings sections at postholdings.com. In addition, the release and slides are available on the FTC's website. Before we continue, I would like to remind you that this call will contain forward-looking statements, particularly the expected timing of the completion of the acquisition, the expected funding sources of the acquisition, and the expected financial contribution of the acquired business. These forward-looking statements are subject to risks and uncertainties outlined in the press release and in our FTC Filings that should be carefully considered by investors, as actual results could differ materially from these statements. These forward-looking statements are current as of the date of this call, and management undertakes no obligation to update these statements. As a reminder, this call is being recorded, and an audio replay will be available on our website. Finally, this call will discuss certain non-GAAP measures. For more information on these non-GAAP measures, see the details in our press release. With that, I will turn the call over to Rob. Thanks, Jennifer. Thank you, everyone, for joining us. So hopefully you all have a deck that we posted to our website this morning, so I'm going to speak from that. So, just turning to page one, disclaimer, disclaimer, disclaimer, disclaimer. Page seven. So, I'm very excited to share with you that Post has agreed to purchase from the J.M. Smucker Company this basket of iconic pet food brands. They're anchored by Rachael Ray Nutrish. In addition to Nutrish, we're acquiring Nature's Recipe, 9Lives, Kibbles 'n Bits, and Gravy Train. We're paying $1.2 billion in a combination of cash and stock, such that Post will remain leverage neutral at approximately 5.2x. More specifically, we will deliver $700 million in cash and $500 million in new shares. We expect to close early in our third fiscal quarter. It's been a number of years since we last made an acquisition of this size. We have long considered pet a natural extension for our buy-and-build strategy. However, so far we have not been able to identify an opportunity at a reasonable price that provided sufficient scale to matter and upon which we could build. We think this is a compelling opportunity that nicely fits the bill. At nearly $1.4 billion in revenue, focused on mainstream and entry premium price points, we have enough scale to matter and to build upon. In terms of purchase multiples, we are acquiring this business for approximately 8x Adjusted Synergized EBITDA. That's net of the expected tax benefits of $120 million. You all know the carve-out routine. First, we estimate a theoretical standalone P&L, and then we estimate synergies. On that basis, we are acquiring approximately $100 million in adjusted EBITDA, and we expect by year three to deliver $30 million in synergies. We anticipate margin opportunity to follow from additional investments in manufacturing. Once we get through the one-time integration costs, we expect the acquisition to be cash flow accretive after considering the share issuance. Those one-time costs are in the neighborhood of $75 million. As I mentioned, this transaction is leverage neutral to Post. We want to retain ample capacity for M&A or even to buy back the shares we are issuing. The balance of the purchase price is delivered in new Post common equity. Slide eight shows the brands I just listed and their respective contribution to sales, but also highlights that we are acquiring three manufacturing sites and a distribution center. Most importantly, I am honored to welcome nearly 1,100 new colleagues to Post. Slide nine is interesting. You all know pet is a great category. Like many others, it is really a series of price-driven subcategories. In recent years, premium and super premium have seen terrific growth, frankly, at the expense of some of the brands we are buying. More recently, mainstream and entry premium have gained traction as consumers have shifted to value. We expect this to persist for some time. Hopefully, over time, we will expand into additional price points. Slide 10 puts this acquisition into the framework we have shared with you many times in terms of our acquisition targets. You all know that Post tends to value cash flow reliability over growth, and our capital allocation strategy leads toward more modest organic and substantial inorganic growth. This opportunity quite nicely ticks the boxes of what we look for in investments. The right-hand side of the slide shows the cash flow lift. Again, please recall we will issue approximately 5.4 million shares. In terms of synergies, slide 11 shows the key buckets. First, we ship to the same places, and the heavier weight of pet nicely complements the bulkier cereal product and enables us to drive and deliver more efficiently. We expect to leverage the administrative functions of Post's consumer brands: IT, finance, HR, and legal to get better leverage from these functions. You know we skew towards focus over maximum efficiency. We believe a dedicated commercial team and a shared administrative function is the best of both. Meanwhile, we expect procurement synergies, as so much of both portfolios are grain-based. Slide 12 is aimed at reminding you of our core skill at acquiring footholds in categories and building around them. In the past decade, we have been disciplined in our acquisition strategy, expanding into new categories, segments, and geographies for the right assets. At the same time, we have monetized assets opportunistically in our pursuit of creative value and driving leverage returns for our shareholders. We like much about this opportunity. The cash flow dynamics, the potential to expand margins, the synergies, h owever, what is really exciting is the optionality potential it creates. Perhaps we add to it and further leverage its strength. Perhaps it becomes a standalone platform or business someday. We look through the narrow lens of how do we create value for you and for each other and try to extend upon what you see in these pages. Slide 13 also lays out our expected organizational structure after closing and is a reminder of the way we build platforms for success. We expect pet to be managed under Post's consumer brands and its current president, Nicolas Catoggio. Finally, slide 14 summarizes our strategic and financial rationale. We are very excited about this acquisition. My aim this evening was simply to share the what, how, and why of Post moving to pet. At this point, I will turn the call back over to the operator for questions. Certainly. At this time, if you would like to ask a question, please press star one on your touch-tone phone. You may withdraw your question at any time by pressing star two. Once again, that is star and one. And we'll take our first question from Andrew Lazar with Barclays. Please go ahead. Great. Thanks a lot. Good afternoon. Hey, Andrew. Yeah. A couple of things. So I guess, first off, Rob, you mentioned some of the benefit that some of the brands you're purchasing have been receiving recently from consumers maybe trading out a bit or looking for a little more value in the pet food space. It seems to me there's been a lot of debate about how much of that is truly trading down versus some of the more premium brands in the space really just not having enough capacity? And that's clearly benefited some of the brands that you're buying, at least for, as you said, some period of time. I guess, how did you incorporate that and how transitory that may or may not be in the way you thought about sort of valuing this transaction? And I've just got to follow. Yeah. So, we looked at the amount of capacity coming online, which is pretty well documented, and expressed that in the number of years that that will take to consume at the growth rates that we expect. And we think that if there is some reversal of the recent trend, that will be transitory as we see more benefit from value seeking and the use of that capacity that is coming online, w e think it's only a couple of years of capacity given the growth rate of the category at that brand price point. Got it. And then I know the last year or so, Smucker created a separate pet sales force, right, separate from its main retail grocery sales force. I guess, how will that transfer over to you? Will you have a separate sales force from the current Post Consumer Brands piece and ready to eat cereal, or will they be the same? Because they are selling into a lot of the same channels, but how will you structure the sales piece of this? Yeah. Great question. And, I tried to address that a bit in my prepared remarks. We believe that it's important to have a dedicated sales force. What we are trying to do is to find the right equilibrium between sharing the functions like finance, IT, legal, HR, etc. That can be shared across that consumer platform, but having dedicated teams for sales, marketing, manufacturing. A key one that I didn't mention was logistics w e would share logistics because we think that's a key bucket of synergies. But, we, like Smucker, believe that there's real value to having a dedicated sales force despite the fact that there is overlap in the customer base. Right. And then very last thing would be, you know, it's well documented that under Smucker's ownership, the Nutrish brand specifically has struggled, right, to find sort of find its footing a nd, it's like a brand that's, as you mentioned, it's kind of not mainstream i t's not as premium as some others. The brand equities, I guess, just had there was some complexity, some additional perhaps SKUs and subcategories that made it a little more complex. When you looked at this particular brand, the larger of the assets that you're buying, how did you think about where the opportunity is going forward that maybe wasn't completely optimized under the sort of current ownership? And how did you get comfortable with that? Thanks so much. Well, and as you can imagine, I don't want to go into the details of brand strategy in this forum, but, what I can tell you is that the way you described it, also fits Honey Bunches of Oats. And I think that the learnings that we have from that experience and the experience of managing the totality of the Post portfolio going back to 2011, I think extends very nicely to the pet segment. Both from the brand composition, the degree to which those brands have been focused on, the competitive set that the brand competes with, with the key difference being one's a growing category and one's not s o, we feel very comfortable, given our history and heritage and our ability to make that transition with Rachael Ray Nutrish. I think I overlooked one of your questions about whether that sales force was coming, from Smucker's, and the answer is in part. So, we will take part of that sales force and build upon it. Great. Thanks so much. Thank you, Andrew. We'll take our next question from Jason English with Goldman Sachs. Please go ahead. Hi, Jason. Hey. Thanks for the question. So I'm trying to square w e got two companies here, right? J.M. Smucker and Post both putting out disclosures on this one. And, we're trying to triangulate the numbers out here. Based on the dilution that Smucker has put out, I'm backing into an EBIT of around $100 million and EBITDA probably close to $170 million, $175 million [inaudible] It's fast and loose math, so there's potential for error. But that number, is obviously a substantial difference from the $100 million that you're throwing out as a starting point pre-synergy. Is that, I mean, I can't believe that it's $75 million to stand up the other half of the sales force and whatever else you have to add. What am I missing? Or maybe it's just like my numbers are wrong, which is fine. Tell me that too. No. That's what I was alluding to, with respect to the process of creating these standalones is that obviously these brands have contribution to their current parent. They have then a standalone cost structure, which is what I characterize as $100 million a nd then we will apply whatever infrastructure we have, to get back to a number higher than that over time. So, there is incremental cost related to standing up the sales force. We would anticipate some incremental marketing spend. There are some dyssynergies initially as a result of transition services agreements, but we would expect to synergize back to a higher number over time. Okay. Okay. So, the math is kind of right j ust take the spread, and that's the incremental cost. The capacity utilization and the three manufacturing facilities you're acquiring, where does that stand? It's high. We think there's some opportunity to create some latent capacity, but, right now it's operating very near capacity. Okay. That's kind of surprising because these brands haven't really grown t hey've actually been shrinking for many years. So, I guess two questions related to that. First, what are you underwriting in growth? Because I see your growth figures you're showing here, but there's a lot of noise in there because we've just had so much inflation in the system. And I suspect if we strip that out and looking at a pet population that's stagnated post-COVID, there's very little underlying growth in these segments that you're participating with. Is that an unfair read? Or what are you underwriting where you're at? Yeah. Let me answer in the context of how do we think we create value with this? because that's part of the equation. I think if you look at the, in part, the calculus you just went through, if we maintain at the purchase price that we are paying, we have a nice, decent outcome on a Cash-on-Cash Return. If we maintain and expand margins, which we think there is an opportunity to do, obviously that gets more attractive and allows us to reinvest some in additional marketing, which then leads to the third lever of potential value creation, which is some marketing-enhanced driven growth. And, in tandem with that, margin expansion, some capacity expansion by virtue of the investments in manufacturing that I referenced. And then fourth and finally, we think it lends itself to additional investments in the category, building upon the first three of those activities. So, it doesn't need to grow to be an attractive outcome. We think there are opportunities with some investments in manufacturing to both create margin and capacity that enable marketing for growth. But, the way we think about this is to have multiple levers of value creation based on what those outcomes may be. Okay. I've got more questions, but I'll pass it on. Let's take your time. Once again, as a reminder to ask a question that is star and one. We'll take our next question from Robert Dickerson with Jefferies. Please go ahead. Great. Thanks so much. So, I guess this first question, you know when you say their portfolio optimization opportunities, and then also I think I just heard you say maybe in the plan would be to increase the marketing spend a little bit. If you think about kind of where the starting point is on the implied EBITDA margin of the business, is this or is it within the plan, that there would be some material margin expansion opportunity as well? That's the first question. In the numbers that we have provided in the press release, we have not assumed margin expansion. Okay. Fair. And then just in terms of, I guess, your analysis, Rob, as opposed with respect to kind of the channel growth/distribution opportunity, are there thoughts around kind of where these brands may be able to succeed a bit better in certain channels relative to others? or is this kind of a broad-based strategy across all channels? Well, I think if you look at these brands, they are tried and true brands in FDM. They are not particularly strong in specialty and other channels. So, I think we would be focused on making sure we are fully developing the opportunities where we are strong, before seeking to complement any of this new portfolio in channels that are a bit more of an extension from where they currently play. If we are going to go into those channels and I have no idea right now if we will or not, it likely would be through further acquisition. Got it. Fair. And then two quick follow-ups t he one was what you just said, which is acquiring this business, which isn't small relative to overall Post. This you would suggest, I guess, is the entry into pet, but obviously gives you the opportunity to acquire thereafter if so desired. Which is historically what we have done in categories. We are focused exclusively on this right now. I'm not trying to indicate that this is an immediate need because we see a lot of opportunity just in the bundle of assets that we are acquiring a gain, the four items I just went through: stabilization and yield, margin expansion, reinvestment and marketing, and then and only then do you get to M&A outcomes. Yep. Got it. Okay. Last quick question. It's just all the equity issued to Smucker. I might have missed this just due to short period of time. Are there any lockup provisions on the equity or just kind of how is that equity exchange kind of work in margin? There are no lockup provisions. Got it. All right. That's all. Thanks so much. Thank you, Rob. We'll take a follow-up question from Andrew Lazar with Barclays. Please go ahead. Great. Thanks so much for the follow-up, Rob. Just one quick one. I think you said kind of over time that perhaps gaining scale in PCB, could potentially, I guess, just increase your, let's call it, broader optionality around what you could potentially do with other businesses, sort of like what you did with Bell Ring and things of that nature. I guess this is a sizable asset and obviously increases your scale i t's basically talking about monetization opportunities across different parts of the portfolio. And that's not something you obviously mentioned outright as one of the potential benefits of this a nd I realize it's out of the scope of this specific transaction, but, am I on the right track there that that at least increases your possibilities or optionality in that regard? Well, I mean, to the point that I referred to it in my opening comments that one of the things we like is the potential to create a business m aybe, it will become a segment m aybe it will become a standalone business on its own, sometime i would tell you that what you just went through is kind of built into our DNA? So, we always think in those terms. Those events are by their nature infrequent, but, we are always looking for how best to structure the organization. And, the organization in that context grows very large to include not just what we currently own, but, what we could create in the form of separate spinoffs or recapitalizations. So I'm taking a long way to say yes. Part of the attractive aspect of this transaction is that it could lead to further creative portfolio outcomes. Great. Understood. Thanks so much. Thank you. There are no further questions at this time. This will conclude today's conference call. Thank you for your participation. You may disconnect at any time.