Post Holdings, Inc. has announced its plan to close two of its Post Consumer Brands cereal manufacturing facilities in Cobourg, Ontario, and Sparks, Nevada. The closures are aimed at reducing excess manufacturing capacity in response to the declining ready-to-eat cereal category. The two facilities employ approximately 300 employees and are expected to cease operations by the end of December 2025.
Post anticipates incurring cash and noncash pre-tax charges totaling around $63.5 to $67.5 million in connection with the transfer of production capabilities to other Post Consumer Brands locations and the closure of the facilities. Additionally, estimated capital expenditures of $5 to $7 million, incremental to its previously announced guidance, are expected for the transfer and start-up of production at other locations in fiscal year 2025.
The closure and transfer of production capabilities are projected to result in annual cost savings of approximately $21 to $23 million, starting in fiscal year 2026.
The Cobourg facility has been part of Post Consumer Brands since July 2017, following Post's acquisition of Weetabix. Similarly, the Sparks facility became part of the business in June 2021, after Post acquired the TreeHouse Foods ready-to-eat cereal business. The market has reacted to these announcements by moving the company's shares 3.1% to a price of $115.39. If you want to know more, read the company's complete 8-K report here.
