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  • Flower Foods (FLO) and Tasty Baking (TSTY) Merger Expected to Drive Sweet Synergies 0 comments
    Apr 11, 2011 1:27 PM | about stocks: FLO
    Shares of Tasty Baking Company soared more than 145 percent today after Flowers Foods announced it will acquire Tasty in a merger agreement worth approximately $165 million.

    Per the agreement, Flowers will acquire all outstanding shares of Tasty common stock for $4 per share; the transaction is expected to close in the second quarter of 2011.

    Flowers said it expects the Tasty acquisition will add approximately $115 million to $125 million to Flowers’ 2011 sales, contribute approximately $10 million to $12 million to Flowers’ 2011 EBITDA, and be neutral to slightly accretive to 2011 earnings per share, excluding one-time costs of the transaction. These figures are expected to increase in their 2012 sales contributions.

    “We are very pleased with the addition of Tasty to Flowers,” George E. Deese, Flowers’ chairman and CEO stated in the press release. “Tasty brings a talented, committed team of employees, two highly efficient bakeries, the iconic Tastykake brand, a solid sales base, and an effective distribution system. The merger will expand Flowers’ geographic reach and bring new consumers, new customers, and new opportunities for further growth. It will provide the opportunity to add Tastykake products to Flowers’ existing direct-store-delivery network. With the addition of Tasty, our snack cake business will be significantly enhanced and we will have a new platform to grow our Nature’s Own brand as we make other acquisitions that add needed production capacity for breads, buns, and rolls.

    Charles P. Pizzi, Tasty’s president and CEO, said the merger will generate value for Tasty’s shareholders, employees and surrounding communities.

    “We believe the combination of Tasty with Flowers will create a company with long-term advantages for our employees, customers, suppliers, independent sales distributors, and other constituents. Flowers also shares Tasty’s commitment to the communities in which it operates,” Pizzi stated.

    The companies expect the merger to create various synergies, including the creation of a larger business with a complementary portfolio of high-quality branded and store-brand bakery products; a deeper penetration and distribution of the snack cake category; and the ability to grow the Tastykake brand in its current markets.

    Since 1968, Flowers has completed more than 100 acquisitions, something that Deese says comes after careful consideration.

    “We take a very deliberate approach to selecting acquisitions, focusing on strong brands and premium products that extend our capabilities and geographic reach. We believe Tasty is highly consistent with our acquisition strategy and also offers substantial synergy potential that we expect will generate a strong financial return for our shareholders,” Deese stated.

    For more information visit flowersfoods.com or tastykake.com

    Please see disclaimer on QualityStocks website: disclaimer.qualitystocks.net
     
    Stocks: FLO
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