Business Advisor: November 2013

Bruce Roher
November 05, 2013
Written by Bruce Roher
Insights into how North American bakeries have been building their portfolio and their brand value.

Merger and acquisition activity is heating up in the bakery industry. This article will highlight some significant acquisitions that have occurred during the last two years and provide insight from the company executive statements in press releases about the expected benefits of the acquisition.

Flowers Foods completed a major acquisition of bread assets on July 30. This included 20 bakeries: the Wonder, Merita, Home Pride, Butternut, Nature’s Pride brands, as well as 36 depots from Old HB (formerly Hostess Brands). The adjusted purchase price was $355 million, and the acquisition made Flowers Foods the second largest baker in the United States.

“These assets fit very well with our strategy to grow our fresh baked foods through market expansion and acquisitions,” said Allen Shriver, president and CEO of Flowers Foods.

As baby boomers have become more and more health conscious, demand for businesses that offer organic and nutritional snacks has increased dramatically. For example, Kameda USA purchased a 77.8 per cent stake in Mary’s Gone Crackers on March 26. The company manufactures snacks including its super-crispy gourmet seed crackers, pretzels and cookies. All of the products are gluten-free and made without trans fats or dairy.

“We feel confident this new path will allow us to bring new products and innovations to the market with greater speed and agility, and are eager to expand our business with our original vision intact,” said Dale Rodrigues, co-founder of Mary’s Gone Crackers.

North American Biscotti baker Nonni’s Foods made two important acquisitions in the last two years. In 2012, it acquired THINaddictives Premium Cookies from V.I.S., a Montreal business established in 1997. The cookies are low in calories and made without oil. Nonni’s is majority-owned by Wind Point Partners, a private equity firm.

“The THINaddictives brand is a strong strategic fit with Nonni’s, which complements our successful biscotti business and allows us to expand into the fast-growing thin cookie segment, giving us two growing brands within the premium cookie category,” said Dave Bere, CEO of Nonni’s Foods.

In January, Nonni’s Foods announced another acquisition. This time it was with La Dolce Vita, a manufacturer of artisan Italian biscotti and specialty cookies located in Arizona.

“Two key components of our value creation plan at Nonni’s were to expand distribution and to acquire complementary product lines. La Dolce Vita is an excellent fit because it positions Nonni’s to expand into specialty retailers and other areas of the grocery store,” said Mark Burgett, a managing partner at Windpoint.

In December 2012, Richtree Products Corporation announced the acquisition of family-owned Goglanian Bakeries to expand Richtree’s current pizza business and provide the company with a complementary line of par-baked pizza crusts, flatbreads and pitas.

“The acquisition strengthens our competitive position within the pizza category, one of our highest growth priorities for our U.S.-Canada Region. We are confident that the Goglanian business has the capacity to grow exponentially as it transitions into our organization to leverage our scale, management depth and customer access in the U.S., Canada and other regions across the world,” said Richard Ferranti, executive vice-president and chief operating officer.

In October 2012, B&G Foods announced that it had purchased the New York Style and Old London brands from Chipita America for approximately $63 million. The purchase included a manufacturing facility in North Carolina, with approximately 250 employees.  New York Style is the maker of Bagel Crisps, and Old London offers a variety of Melba products.

More recently in July, B&G completed the acquisition of Robert’s American Gourmet Food for approximately $195 million. The company’s Pirate Brands include baked, all natural, and free of trans fat and gluten snack brands such as Pirate’s Booty, Smart Puffs and Original Tings.

“We are delighted to add Pirate Brands, including the iconic Pirate’s Booty, to the B&G Foods family of brands. The acquisition of this business and its collection of growing natural snack foods marks the second addition to our snack foods portfolio since we entered the category last October,” said David Wenner, president and chief executive officer of B&G Foods.

As part of your company’s growth strategy, you many wish to consider developing an M&A plan with your financial advisor. Adding a well-known brand to an existing portfolio enhances the profile of the business in the marketplace. It also helps to strengthen distribution channels, allows expansion into complementary lines and provides an opportunity to capitalize on cost savings and substantial revenue growth.


Bruce Roher is a partner of Fuller Landau LLP, Chartered Accountants, specializing in business valuations and providing advice on acquisitions and divestitures. He can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or 416-645-6526.

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