Despite Slimming Down, Wide-Moat Kellogg Prudently Working to Cook Up Profitable Sales Growth
Wide-moat Kellogg announced on April 1 it has inked an agreement to sell its cookie, fruit snack, cone, and pie crust businesses (including brands such as Keebler, Mother’s, Famous Amos, and Stretch Island) to privately held Ferrero for $1.3 billion. The deal, which is expected to close by the end of July, implies a valuation of around 1.5 times trailing sales (only modestly below the 2 times expectation we had previously laid out) and 17 times operating income, which still strikes us as a decen...Kellogg is engaged in the manufacture and marketing of ready-to-eat cereal and convenience foods. The company's principal products are snacks, such as crackers, savory snacks, toaster pastries, cereal bars, granola bars and bites; and convenience foods, such as, ready-to-eat cereals, frozen waffles, veggie foods and noodles. The company's snacks brands are marketed under brands such as Kellogg's, Cheez-It, Pringles, Austin, Parati, and RXBAR. The company's cereals and cereal bars are generally marketed under the Kellogg's name, with some under the Kashi and Bear Naked brands. The company's frozen foods are marketed under the Eggo and Morningstar Farms brands.
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