Milling & Baking News Corporate Profiles - 2017 - 70

Company Overview

Grupo Bimbo S.A.B. de C.V.
East Balt central to global ambitions

ver the past year, Grupo Bimbo
S.A.B. de C.V. has acquired baking
businesses in India, Colombia and
Canada. But a recent acquisition of a company based in its largest existing market, the
United States, may offer the most revealing
peak into Bimbo's global ambitions.
For many years Grupo Bimbo has been the
largest commercial baking company globally.
Acquisitions in recent months have included
Ready Roti India Private Ltd., a New Delhi,
India-based maker of bread, pizza bases,
and sweet and savory buns; Toronto-based
Stonemill Bakehouse makes slow fermented
craft bread baked in stone ovens using nonG.M.O. certified and organic ingredients;
and Panettiere, a frozen baked foods business based in Bogota, Colombia.
More dramatic was an announcement
in July that Grupo Bimbo had reached an
agreement to acquire Chicago-based East
Balt Bakeries from One Equity Partners for
$650 million.
While East Balt's origins are in supplying
buns to U.S. quick-service restaurant chains,
the company over the last few decades
has become a global force in food service
baking.
For Bimbo, the acquisition is expected to

Chief executive officer -
Daniel Servitje

70 \ October 2017

provide an entry into new geographies and,
much more than in the past, access the food
service market, said Daniel Servitje, Bimbo's
chief executive officer.
"East Balt Bakeries provides exactly the
kind of compelling opportunity we are seeking in terms of complementing and growing
our current food service business and providing further geographic expansion and diversification," he said. "The company is one of
the leading global food service focused providers of baked goods to quick-service restaurants in 11 countries around the world.
East Balt Bakeries enjoys decades long relationships with some of the world's leading
Q.S.R.s such as McDonald's, Wendy's, Burger
King and KFC, among others. It operates 21
baking plants and employs about 2,200 associates."
He said the $650 million purchase price
Bimbo will pay equates to a 9.3 EBITDA
multiple and that Bimbo has no presence in
most of the markets in which East Balt operates around the world.
"While East Balt Bakeries has headquarters in Chicago, it is really an international player with a majority of its facilities
and revenues located outside of the United
States and in the largest and the fastest
growing Q.S.R. markets in the world," Mr.
Servitje said. "The geographic footprints of
the two companies intersect in only three
markets: the U.S., Morocco and China, where
our businesses are complementary and offer potential for synergies, scale and growth.
We also gained entry to eight new countries
through East Balt namely France, Italy and
Switzerland in Western Europe; Ukraine and
Russia in Eastern Europe; Turkey and South
Africa in the Middle East; and Africa and
South Korea in Asia."
Bimbo already is a food service supplier in
markets in which the company operates, Mr.
Servitje said. He described the Q.S.R. segment as especially attractive.
"The industry is in a sustained period of
growth, driven by tailwinds in out-of-home

Grupo Bimbo
net income

in millions of Mexican pesos
5,898

2016

5,171

2015

2014

3,518

Grupo Bimbo
net sales

in millions of Mexican pesos
2016

2015

2014

252,141

219,186

187,053

Grupo Bimbo
share price

per share in Mexican pesos
56

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