US baker Flowers Foods is to buy regional peer Lepage Bakeries in a deal that will expand its reach in the north-east of the country.
The US$370m cash-and-stock deal, announced today (31 May), will include two bakeries in Maine and one in Vermont.
The transaction, Flowers said, provides it with a direct-store-delivery (DSD) platform to “accelerate” the company’s penetration of its Nature’s Own and Tastykake brands in New England and New York. It is expected to add $0.03 to $0.05 to Flowers’ EPS in FY2012, excluding acquisition costs.
Lepage also has a portfolio of regional brands including Country Kitchen and Barowsky’s.
On completion of the transaction, Lepage will operate under its current name as a part of Flowers’ DSD segment. Lepage president and CEO Andrew Barowsky and chairman Albert Lepage will serve as co-chairmen of the board of the firm. Barowsky also will serve as vice chairman of innovation for Flowers.
“The Lepage name is one of the oldest and most respected in the baking industry and we are fortunate to combine this fine organisation with Flowers Foods,” said chairman and CEO George Deese. “We believe the addition of Lepage supports our strategy as it will bring efficient bakeries with available production capacity, access to markets in the north-east, new products and brands, and more than 550 experienced team members to our company.”
Flowers expects to complete the transaction in its fiscal second quarter, pending necessary regulatory approvals.