Post, the maker of Raisin Bran and Grape Nuts breakfast cereals, is close to a deal to sell its private-label food business, The Post has learned.
Post Holdings could receive more than $1 billion for the unit, which makes nut butter, dried fruit and nut, pasta and granola products, one source said.
The name of the suitor could not be learned — but it has been rumored that Cerberus Capital Management has been involved, at least on the periphery, in talks surrounding a sale.
Post generates about 10 percent of its profits from the private-label business. The company announced Jan. 11 it was exploring alternatives for the division — options that include an IPO or sale.
The St. Louis-based company will likely use proceeds from the sale to buy other branded food businesses, a food banker said — noting that one option is B&G Foods, which owns Green Giant and Pirate’s Booty.
“Cereal does not have great growth prospects,” the banker said, and diversifying away from cereal and exiting private label helps better define Post.
Post’s shares have been down about 5 percent over the past 12 months, closing Wednesday at $78.76.
Cerberus and Post Holdings did not return calls.