Flowers Foods, Inc. announced that the U.S. Department of Justice has approved an agreement under which Flowers will acquire certain assets and trademark licenses from BBU, Inc., a subsidiary of Grupo Bimbo S.A. B. de C.V. The financial terms of the transactions were not disclosed.
Under the terms of the transactions, Flowers will receive perpetual, exclusive, and royalty-free licenses to the Sara Lee and Earthgrains brands for sliced breads, buns and rolls in the state of California, which together account for annual sales of approximately $134 million. Flowers also will receive perpetual, exclusive and royalty-free license to the Earthgrains brand for a broad range of fresh bakery products in the Oklahoma City, Okla., market area. The transactions will be completed in phases. The Oklahoma City license will be completed shortly, and the first phase of the California transaction is expected to close in the first quarter of fiscal 2013.
Commenting on the announcement, George E. Deese, Flowers Foods’ chairman and CEO, said, in a prepared statement, “The acquisition strengthens our market presence in California, adding about 14.5 million people to the 70 percent of the U.S. population that currently has access to our fresh breads and rolls. This moves us closer to our goal of reaching 75 percent of the U.S. population through our direct-store-delivery system by 2016.”
Flowers Foods has proven experience integrating acquisitions. The company has completed more than 100 acquisitions since listing publicly in 1968, including 13 in the past decade. Most recently, Flowers acquired Tasty Baking Co. in 2011 and Lepage Bakeries, Inc. in 2012. Management will discuss the acquisition of the Sara Lee assets on its quarterly earnings conference call, which is scheduled for Nov. 8, 2012.
