Kellogg Looks to Bolster Emerging Market Presence With Parati Tie-Up; Shares a Bit Heated
Narrow-moat Kellogg is to acquire Parati, a Brazilian supplier of biscuits, powdered beverages, instant noodles, and dried pasta, for $429 million. The all-cash tie-up is valued at around 2.5 times forward sales, but is not material enough to change our $70 fair value estimate (at around 1% of Kellogg’s total sales base). Despite the deal's small size, we think it is strategic in that it affords Kellogg the opportunity to further build out its presence in faster-growing emerging markets, which p...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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