Flower Foods to acquire bakery assets, trademarks from BBU

US-based baking company Flower Foods has agreed to acquire certain bakery assets and trademark licences from BBU, a subsidiary of Mexico-based Grupo Bimbo, for an undisclosed amount.

The deal has received clearance from the US Department of Justice.

Under the agreement, Flower Foods will gain exclusive, perpetual and royalty-free licence to the Earthgrains and Sara Lee brands for buns, rolls and sliced breads in California.

These products have estimated sales of $134m per year.

Flower Foods will also receive exclusive, perpetual and royalty-free licence to the Earthgrains brand for a range of fresh bakery products in the Oklahoma City market area in the state of Oklahoma.

The transaction will be closed in phases, with the Oklahoma City licence expected to be completed shortly, and the first phase of the California licence likely to be completed in the first quarter of fiscal 2013.

Flowers Foods chairman and CEO George E Deese said the deal will expand the company’s reach in California, adding nearly 14.7 million people to the 70% of the US population that presently has access to its fresh breads and rolls.

"This moves us closer to our goal of reaching 75% of the US population through our direct-store-delivery system by 2016," Deese added.

Flower Foods has been seeking to expand its market presence through acquisitions – it has completed 13 acquisitions over the past ten years, and in 2012 it completed the purchase of US baking company Lepage Bakeries for $370m.

Flowers Foods, headquartered in Georgia, US, operates 44 facilities that produce a broad range of bakery products under brands such as Nature’s Own, Tastykake, and Mrs. Freshley’s, and it reported revenues of $2.8bn in 2011.