Kellanova: Short Independent History to Wrap in H1 2025 as Mars Looks to Speed Its Growth Trajectory

Heady top-line growth has characterized the mature North America packaged-food space of late on the heels of robust pandemic demand followed by inflation-induced price increases. But some don’t want the party to end. To further enhance its exposure to the snacking aisle, privately held Mars announced its intention to acquire narrow-moat Kellanova in a nearly $36 billion deal (including debt) that is slated to close in the first half of 2025. The acquisition price, at $83.50 per share or 16.4 times trailing 12-month adjusted EBITDA, strikes us as attractive, given it’s a more-than 10% premium to our $75 fair value estimate. As we expect the deal to close, we’re raising our fair value estimate to align with the takeout price.