Post Holdings could not find a buyer for all of its private-label food business — prompting a move on Thursday to spin off the division and sell a minority stake in it to a Boston private equity firm, The Post has learned.
In a move announced after the markets closed, Thomas H. Lee Partners will buy a 39.5 percent stake in the private-label business — which makes nut butter, dried fruit, and nut, pasta and granola products — for $250 million, plus taking on a slice of the debt, valued at about $625 million.
Post, the maker of Honey Bunches of Oats, Grape-Nuts, Mom’s Best and Raisin Bran breakfast cereals, will retain a 60.5 percent stake in the private-label food business, to be called 8th Avenue Food & Provisions.
The deal is expected to be completed in October.
Earlier, PE firm Cornell Capital was among those that did thorough due diligence on the private-label business — but passed as Post was seeking about $1 billion for the business.
Post, based in St. Louis, announced on Jan. 11 that it was exploring alternatives for the division — moves that could include an IPO or sale.
“Cereal does not have great growth prospects,” an M&A banker said, and diversifying away from cereal and exiting private label helps better define Post.
A Post Holdings spokesperson did not return calls.