THOMASVILLE, GA -- Flowers Foods Inc. has agreed to acquire Tasty Baking Co. for $34.4 million in cash, boosting its presence in the mid-Atlantic region and building upon the legacy of the iconic Tastykake brand. The deal is expected to close in the second quarter.
Flowers Foods will pay $4 a share. News of the acquisition comes three months after Tasty Baking said tight liquidity forced it to delay some of its debt payments. Including debt assumption, the deal comes to about $165 million.
Tasty Baking, a 100-year-old company based in Philadelphia, sells its cakes, donuts, pretzels and brownies under the Tastykake, Kandy Kakes and Krimpets brands.
Founded in 1919, Thomasville, GA-based Flowers Foods markets Mrs. Freshley's packaged pastries, popular in vending, along with the Nature's Own and Blue Bird brands. It operates 39 bakeries, and gains two more through the Tasty Baking acquisition.
Flowers has grown through 11 acquisitions over the past decade. The Tasty deal expands its geographic reach by adding about 24 million customers.
Upon completion of the transaction, Tasty will become part of Flowers's direct-store-delivery segment. Flowers anticipates that Tasty Baking will increase its market reach to about 61% of the U.S. population and will add $115 million to $125 million to its 2011 sales, which are expected to be in the range of $2.6 billion.