The Hiestand Group has announced the acquisition, subject to due diligence, of German-based Fricopan Group.

The company's board of directors and group management said in a statement they consider the purchase of Fricopan an ideal complement to an expansion of its existing business.

The transaction yields an increase in earnings per Hiestand share, as the Swiss firm reports a 9% increase in sales for the third quarter of 2006.

Hiestand Group chairman Albert Abderhalden said: "Fricopan gives us access to new customer groups and new distribution channels, such as significant food retailers. Fricopan products provide an ideal complement to Hiestand's range. Both Hiestand and Fricopan will benefit from this potential for synergies."

The two acquired companies will continue to function as independent subsidiaries within the Hiestand Group and will report directly to its executive management.

Fricopan's managing director Werner Herterich said: "With Hiestand as our partner, we have found an ideal strategic solution for the future. Its long-term know-how, leadership in innovation and financial strength will secure the healthy ongoing development of our company."

The purchase price will be roughly equivalent to sales in fiscal 2006, financed without a share capital increase and paid in cash, the company said.

Fricopan, a family business producing frozen and chilled bakery products, generated sales of almost EUR100m (US$125.3m) in 2005.

The deal is expected to close mid-November 2006.

Hiestand Group CEO Wolfgang Werlé said: "By strengthening our market position in the growth market of Germany and giving us access to new distribution channels such as grocery retailers, Fricopan opens up new perspectives to our path towards sales of CHF1bn in 2010. This acquisition will enable us to generate sales in excess of CHF500m by the end of 2006."