Bimbo Bakeries USA acquires Beefsteak bread brand from Hostess

Bimbo Bakeries USA, the American arm of Mexican baking company Grupo Bimbo, has completed the acquisition of Beefsteak bread brand from Hostess Brands for $31.9m.

The acquisition, which was funded with cash holdings, is part of the Hostess Brands bankruptcy proceedings.

Beefsteak is one of the leading rye bread brands in the US, in terms of volume, and has a strong presence in the Midwest and Mid-Atlantic regions.

Bimbo Bakeries USA noted that the acquisition offers a significant opportunity for nationwide expansion.

The acquisition comes after Grupo Bimbo won the Beefsteak bread brand in an auction, outbidding rival Flowers Foods in February this year.

Bimbo Bakeries USA, based in Horsham, Pennsylvania, is a leading bakery company in the US, and its brands include Arnold, Ball Park, Bimbo, Boboli, Brownberry, Entenmann’s, Earthgrains, Sara Lee, Tia Rosa, Francisco, Marinela and Stroehmann’s, among others.

Hostess Brands, a US-based bankrupt producer of bakery products, is divesting its assets to several food companies in separate transactions.

Private equity firms Apollo Global Management and Metropoulos & Co have entered into an agreement to acquire a majority of Hostess Brands’ snack cake business for $410m.

Flowers Foods has agreed to acquire the majority of Hostess’ bread business and other assets in a $360m deal.

Hostess Brands’ other proposed transactions include the sale of the Drake’s snack cake brand and certain equipment to McKee Foods for $27.5m; and the sale of Sweetheart, Eddy’s, Standish Farms, and Grandma Emilie’s bread brands, four bakeries, 14 depots, and certain equipment to United States Bakery for $30.9m.

Established in 1930, Hostess Brands has been affected by increasing debts, soaring labour costs and the changing tastes of consumers; it filed for bankruptcy in January 2012 for the second time in its history, declaring assets of $982m and debt of $1.43bn.

In November 2012, Hostess received approval from the US Bankruptcy Court in New York to close its business and sell its assets.