Milling & Baking News - April 1, 2014 - 11

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Flowers offers long-term plans
for acquired Hostess plants
NEW YORK - Slow and steady is the
strategy Thomasville, Ga.-based Flowers Foods Inc. has adopted for the reopening of plants acquired as part of
its purchase of certain Hostess bread
assets last year.
During an annual analyst day event
held March 20 at the New York Stock
Exchange, Bradley K. Alexander described a plan that has Flowers opening between five and seven bakeries
over the next five years. Mr. Alexander is president of Flowers Bakeries/
D.S.D. Segment.
Flowers acquired 20 idled baking
plants and other "bread assets" from
Hostess Brands in July 2013 for $355
million. The first of the bakeries to reopen was in Henderson, Nev., in late
November 2013. Built in 2004, the
Henderson facility is the newest of
the facilities acquired by Flowers from
Hostess. The plant produces Nature's
Own for markets in southern Nevada
and parts of California.
"It was a successful start-up and an
important part of our solution for production capacity for California," Mr.
Alexander said.
More recently, Flowers on March 24
said it will open a bakery in Knoxville,
Tenn., in late May. The plant, which
was one of several that were upgraded
by Hostess in the early 2000s, will operate with one bread line and will be
renamed Flowers Baking Co. of Knoxville. The bakery initially will employ
about 60, but the number is expected to
increase to more than 100 as more production shifts are added, Flowers said.

During the analyst day presentation, Mr. Alexander said the Knoxville
bakery will "help support capacity
needs in that market."
"Our growth in this area has been
strong," he said.
In the next two years timeframe -
2015-16 - Mr. Alexander said Flowers
expects to open two to three bakeries

bakingbusiness.com / world-grain.com

Flowers has listed 9 bakeries and 21
depots for sale.
"We have contracts pending on several of those properties, and several transactions for sale of the depots are already
completed," he said. "On an annual basis, our carry-in costs would be reduced
by about $10 million when the nine bakeries and the depots are sold. Depending on the time of the sales transaction,
we could see improvement in 2014 of
as much as $5 million. We have inventoried all equipment and parts for the

Acquired assets - longer term TERM PLAN
ACQUIRED ASSETS - LONGER plan
2013-2014
2013 - 2014
Open Henderson, NV and
Knoxville, TN
9 bakeries/21 depots
currently o ered for sale

Open bakeries as consumer demand increases
Henderson, Nev.
Henderson, NV
Opened 11/13
Opened 11/13

Knoxville, TN
Knoxville, Tenn.
To open late spring
To open late spring 2014

2015-2016
2015 - 2016
Open 2-3 bakeries to support
sales growth
O er certain proper es
for sale

2017-2018
2017 -2018
Open 2-3 bakeries to support
sales growth

FLO DSD territory
20 idled bakeries
46 FLO opera ng

Source: Flowers Foods

to support its sales growth, with another two to three bakeries set to open
in 2017-18.
But not all the former Hostess plants
will be reopened. Mr. Alexander said

Aryzta completes acquisition
of Cloverhill Bakery
ZURICH, SWITZERLAND - Aryzta
A.G. said it has closed on its acquisition of Chicago-based Cloverhill Bakery. Aryzta bought Cloverhill from
Quad-C Management, a middle market private equity firm based in Charlottesville, Va. Financial terms of the
transaction were not disclosed.
Founded in Chicago in 1961, Cloverhill Bakery started out as a small,
family retail bakery and has gone on
to become an innovator of individually wrapped pastries for retail and food
service customers. The company's
line of bakery snacks includes Danish
pastries, cinnamon rolls, crumb cakes,

Business

cake donuts, honey buns and muffins.
The company operates two bakeries
in the Chicago metropolitan area.
Quad-C invested in Cloverhill in
2009, and during its ownership, Cloverhill invested approximately $100
million in growth capital and grew
revenue by more than 80%.
"Back in 2009, Quad-C saw Cloverhill as an exciting opportunity to invest in a high growth market leader in
the packaged foods space, but equally
as important, to partner with an aggressive, talented management team
willing to reinvest significantly with
us as co-owners," said Frank Winslow,

possible use in our other bakeries."
Mr. Alexander did not disclose the
locations of the bakeries that are expected to be open or of those that are
currently for sale. MBN
partner, Quad-C Management. "We
are thrilled with the outcome of our
work together, which resulted in substantial expansion and the creation of
long-term value for the company."
The Cloverhill investment is one of
many consumer-focused investments
in Quad-C's 25-year history. Other
representative investments in the sector include Augusta Sportswear, Generation Brands and Red Robin.
Aryzta's acquisition of Cloverhill is
the latest in a series of moves meant
to expand the Swiss-based company's
presence in North America. In addition
to Cloverhill, Aryzta is on track to acquire Ancaster, Ont.-based Pineridge
Bakery for $340 million. Aryzta plans
to close on the Pineridge transaction in
the second quarter of fiscal 2014. MBN
Milling & Baking News April 1, 2014 / 11

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Milling & Baking News - April 1, 2014

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