Bakery major Flowers Foods is adding to its presence in snacks with the acquisition of US biscuit and snack-bar maker Simple Mills for $795m.
Flowers Foods, home to bread brands including Wonder and snacks like TastyKake, has struck a deal with founder Katlin Smith, Simple Mills management and Vestar Capital Partners, the company's largest shareholder.
Simple Mills is a producer of what Flowers Foods called "premium, better-for-you" snacks, including crackers, biscuits, and baking mixes.
The products are sold available in more than 30,000 stores across the US, with Simple Mills generating annual sales of approximately $240m in 2024, up 14% on the prior year, Flowers Foods said.
After the completion of the deal, Simple Foods will continue to be led by Smith and “her leadership team” and maintain its operations in Chicago, Illinois and Mill Valley, California, the company added.
The transaction is subject to regulatory approval and closing conditions but is anticipated to close in the first quarter of 2025.
Flowers Foods said the move expands the business’ exposure to the better-for-you category and to “attractive” snacking segments.
"With leading market positions and abundant white space for future growth, Simple Mills perfectly fits our strategy of adding compelling brands in better-for-you segments that complement and diversify our existing portfolio," Flowers Foods chairman and CEO Ryals McMullian said.
The deal is also set to strengthen the group's financial profile, Flowers Foods suggested. The Canyon Bakehouse brand owner said it expects the move to cause immediate growth in its net sales and its adjusted EBITDA margins.
Flowers Foods said it will support its new asset by looking to expand its distribution and accelerate innovation.
Smith believes the transaction marks the beginning of a new phase of growth for Simple Mills.
“With Flowers' resources, we will be well positioned to broaden distribution, accelerate innovation, and amplify brand awareness, while advancing our mission,” Smith said. "Flowers has a strong track record of fostering growth in its acquired companies while stewarding and protecting their brand promise."
