Georgia-based bakery giant Flowers Foods has continued its recent spending spree with the acquisition of snack cake maker Tasty Baking Company in a $165m deal.
Flowers, which is no stranger to doing deals, having snapped up more than 100 companies since going public in 1968, said the deal would increase its market access from 53 percent to 61 percent of the US population and add $10-12m to its bottom line this year and $25-30m in 2012.
Tasty Baking Co, which employs 740 staff and operates two bakeries in Philadelphia and Oxford, Pennsylvania, would increase Flowers’ presence in the snack cake category and give the TastyKake brand access to Flowers' distribution network, claimed Flowers’ chief executive George Deese.
“The merger will expand Flowers' geographic reach and bring new consumers, new customers, and new opportunities for further growth.”
Under the deal, which is expected to close in the second quarter of 2011 and has the agreement of both firms’ boards, Flowers will submit a tender offer to acquire all of the outstanding shares of Tasty’s common stock for $4/share in cash.
With sales of $2.6bn, Flowers is one of America’s leading producers of packaged bakery goods for retail and foodservice customers, with a portfolio of brands including Nature's Own, Whitewheat, Cobblestone Mill, Blue Bird, and Mrs. Freshley's.