Irish food group Iaws has announced an EUR292m (US$365m) deal to purchase US bakery Otis Spunkmeyer, the largest acquisition in the food company’s history.

Iaws will pay $340m to private equity group Code Hennessy and Simmons and the company’s current management, with an additional $25m payable if certain performance targets are met. The acquisition is being funded by existing credit facilities.

Otis Spunkmeyer has 62,000 foodservice and retail customers across the US, operating manufacturing facilities in California, Texas, South Carolina and Pennsylvania.

Otis generated revenue of $336m for the year ended 31 December 2005, EBITDA of $48m and operating profit of $29.1m. From 2001 to 2005 the US baked goods manufacturer achieved a net sales compound annual growth in excess of 9%.

Iaws said Otis’s segment of the bakery market is complementary to its existing La Brea bakery business.

Otis CEO John Schiavo, who has headed up the business since 1996, will retain his position, as will the rest of the current senior management team.

Commenting on the transaction Owen Killian, CEO of Iaws Group, said: “Otis Spunkmeyer is an exceptional company with an outstanding performance record, a national distribution platform and a superb product range.

“It has proven management that is committed to the business and that shares Iaws’ passion for customer service, product innovation and quality. Otis’ product categories are complementary with our existing US business in both retail and food service channels. The acquisition is an excellent fit and offers Iaws a strong platform for future growth in the US market.”