Milling & Baking News - December 16, 2008 - (Page 1)

THE NEWS WEEKLY OF GRAIN-BASED FOODS DECEMBER 16, 2008 / FEATURE Bimbo to buy U.S. bread baking assets and brands of Weston With focus and balance, Nolan sees powerful potential at Sara Lee Story on Page 17 LATE NEWS AIPC fiscal profit jumps, stock soars KANSAS CITY - American Italian Pasta Co.'s net income for the fiscal year ended Sept. 26 rose to $19,111,000, equal to $1 per share on the common stock, up 260% from $5,348,000, or 29c per share, in the previous fiscal year. Revenues increased 43% to $569,196,000, which compared with $398,122,000 in the previous fiscal year. "The strong results illustrate the expertise and hard work of our employees, coupled with AIPC's strategic focus on the fastgrowing customer brand pasta markets," said Jack Kelly, president and chief executive officer. "While we're proud of our financial performance in Continued on Page 8 TORONTO - Grupo Bimbo S.A.B. de C.V. has agreed to buy the U.S. fresh bread and baked foods business of Dunedin Holdings, S.a.r.l., a subsidiary of George Weston Ltd., for about $2.4 billion, which includes about $125 million of interest bearing assets. Announced on Dec. 10, the deal will give Bimbo the Arnold, Brownberry, Entenmann's, Freihofer, Stroehmann and Thomas' brand names in the United States. "This is the most important step Grupo Bimbo has taken in its history," Daniel Servitje, chief executive officer, said of 63-year-old Grupo Bimbo S.A.B. de C.V., based in Mexico City, during a Dec. 10 conference call with analysts. "We believe it is a transformative deal, both for our company in terms of consolidating its presence in the United States, as well as for the industry as a whole. "Weston Foods represents a key opportunity for Grupo Bimbo with its portfolio of highly differentiated brands, complemented by regional mainstream favorites; as well as its leadership position and strong presence in the Northeast of the United States." The assets being sold are part of Weston Foods, Inc., Dunedin's principal U.S. operating subsidiary. The assets being sold contributed $2.2 billion of sales and $255 million of EBITDA to Weston's consolidated results for the 52 weeks ended Oct. 4. Dunedin will retain its other U.S. baking interests, including Interbake Foods, which produces biscuits, cookies, cones and wafers, and Maplehurst Bakeries, which produces and distributes frozen bakery products. After the acquisition is completed, Bimbo Bakeries USA, a Grupo Bimbo subsidiary based in Fort Worth, Texas, will own 6 of the top 12 fresh bread brands in the United States, Mr. Servitje said. Bimbo Bakeries USA also will have about $3.9 billion in Continued on Page 12 Lance and Kellogg acquire Archway, Mother's Cake and Cookies assets BATTLE CREEK, MICH. - The assets of Mother 's Cake and Cookies and its subsidiary, Archway Cookies L.L.C., have been awarded to The Kellogg Co. and Lance, Inc., respectively, following a bidding process that concluded Dec. 3 in the U.S. Bankruptcy Court for the District of Delaware. Both companies subsequently closed on the acquisitions. Archway and Mother 's Cake and Cookies abruptly closed their facilities in Battle Creek, Mich., and Ashland, Ohio, on Oct. 3 and subsequently put their assets up for sale. Lance, which arose as the "stalking horse" bidder for the Archway assets on Nov. 19, beat out three other bidders for the acquisition of the company through its subsidiary, Archer Acquisitions. As part of its bid, Lance has agreed to pay approximately $30 million for substantially all of the assets of Archway Cookies L.L.C. and Continued on Page 9

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Milling & Baking News - December 16, 2008