THOMASVILLE, Ga. -- Flowers Foods Inc. has completed its acquisition of bread assets, including 20 bakeries; the Wonder, Merita, Home Pride, Butternut, and Nature's Pride brands; and 36 depots from Old HB Inc. (formerly Hostess Brands). The adjusted purchase price was $355 million.
The acquisition of the Hostess bread assets strengthens Flowers Foods' position as the second-largest baker in the United States by adding brands and bakeries that will enhance the company's ability to steadily expand the geographic reach of its fresh breads, buns, rolls and snack cakes into new markets. Flowers has experience integrating acquisitions, having completed more than 100 since listing publicly in 1968, including 12 in the past decade.
"These assets fit very well with our strategy to grow our fresh baked foods through market expansion and acquisitions," said Allen L. Shiver, president and CEO. "Consumers across much of the country can expect to see these well-known and loved bread brands returning to store shelves over time."
Flowers' direct-store-delivery (DSD) system reaches from Maine to Florida and extends throughout the South, Southwest and west to California. Over the last decade, Flowers has more than doubled the reach of its fresh bread brands--from 38% of the U.S. population in 2003 to 77% of the population today. "We will continue our methodical market expansion, re-introducing the newly acquired brands into markets we currently serve and into new markets as we steadily expand into new regions of the country," Shiver said.
Earlier this year, the company announced its bid to purchase the assets for $360 million, and the bankruptcy court approved the sale in March. On July 8, Flowers received regulatory approval pursuant to the Hart-Scott-Rodino Act. The final acquisition price was adjusted to $355 million as a result of a contemplated purchase price adjustment related to the Butternut trademark.
Shiver said, "Our team has been keenly focused on serving the needs of our customers and the marketplace, and we are seeing the results of our efforts. First quarter sales were up 25.9%, driven primarily by new business gained following Hostess' exit from the market in November 2012 and by incremental sales from previous acquisitions."
Based in Thomasville, Ga., Flowers Foods Inc. today is one of the largest producers of packaged bakery foods for retail and foodservice customers in the United States. Flowers currently operates 44 bakeries that produce a wide range of bakery products. Among the company's top brands are Nature's Own and Tastykake.
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