Grupo Bimbo acquires US-based East Balt Bakeries for US$ 650 million
Grupo Bimbo has entered into an agreement to acquire US-based foodservice supplier East Balt Bakeries for US$ 650 million cash and debt free. The Mexican conglomerate expects to enter into eight new countries in Asia, the Middle East and Africa through this acquisition.
East Balt is a foodservice-focused company producing buns, English muffins, rolls, tortillas, bagels, artisanal breads and other baked goods predominantly to quick service restaurants internationally. According to a statement, East Balt supplies nearly 13 million baked goods daily to more than 10,000 locations in the U.S., Europe, Asia, the Middle East and Africa.
Founded in 1955 and headquartered in Chicago, East Balt employs approximately 2,200 people across 21 bakeries located in 11 countries.
Daniel Servitje, chairman and CEO of Grupo Bimbo, said the acquisition advances the Mexico-based bakery giant’s global growth strategy in “high-growth” segments and markets.
“East Balt brings significant expertise, a remarkable track record of profitable growth, and a geographically diverse and highly scalable platform in the foodservice segment, complementing our current business within this channel,” Servitje added.
“This acquisition continues to fulfill our vision of expanding our global reach to better serve more consumers, with entry to eight new countries. Notably, East Balt enjoys long-standing strategic relationships, with the largest and most established QSR brands in the world”.
In the 12 months to the end of June, East Balt generated annual sales of approximately US$420 million and earnings before taxes of US$70 million, Bimbo revealed. Bimbo CFO Guillermo Quiroz said the deal would be accretive to the company’s margins and earnings. “With an efficient and low-cost service model, a profitable capital deployment strategy, and sustained margins, this accretive acquisition in terms of margins, earnings per share and profitability, supports our value creation objectives.”
The transaction is expected to close during the second half of the year, subject to customary closing conditions, including regulatory approvals. It will be funded using an existing committed long-term revolving credit facility.