The cereal maker Post Holdings has reached a deal to buy Michael Foods, a food processing and distribution company, two people briefed on the matter said on Wednesday.
The deal, which could be announced as soon as Thursday, values Michael Foods at $2.5 billion, one of the people said. It would allow Post, known for brands like Raisin Brain and Honey Bunches of Oats, to expand into egg whites and potatoes.
Shares of Post were up about 7 percent on Wednesday after The Wall Street Journal earlier reported the pending deal.
Representatives of Post and Michael Foods did not immediately respond to requests for comment.
A sale would close a long chapter of private equity ownership for Michael Foods. The company was bought in 2003 by Thomas H. Lee Partners, the Boston-based private equity firm, which sold a majority stake in 2010 to the private equity arm of Goldman Sachs. It was valued at $1.7 billion in the 2010 transaction.
Michael Foods, whose brands include Simply Potatoes, All Whites and Crystal Farms, reported $1.9 billion of net sales for the year ended Dec. 28, an increase of 5 percent from the year earlier.
