Mexico's Grupo Bimbo said Wednesday it reached an agreement to buy Canada Bread Company Limited for C$1.83 billion (about $1.65 billion).
The deal "advances Grupo Bimbo's global growth strategy allowing it to extend the company's presence in Canada and United Kingdom, as well as to expand their distribution networks in the United States, through premium brands such as Dempster's, POM, Villaggio, Ben's, BON MATIN and McGAVIN'S," the Mexican company said in a statement.
Grupo Bimbo is paying C$72 ($65) per share for Canada Bread's 25.4 million outstanding shares.
"We are very pleased to announce the acquisition of Canada Bread for Grupo Bimbo, given it's a company with a strong commercial presence, recognized by customers and consumers for its products' high quality in the different bread categories," Grupo Bimbo chairman and CEO Daniel Servitje said.
The acquisition is subject to regulatory approval, but it is expected to close in the second quarter of this year, Grupo Bimbo said.
"The transaction received the approval from the Administration Councils of Grupo Bimbo, Canada Bread and Maple Leaf, this last one owner of approximately 90 percent of the common shares of Canada Bread," Grupo Bimbo said.
The Mexican company plans to use both cash on hand and long-term credit lines to finance the acquisition.
Canada Bread sells sliced bread, buns, bagels, English muffins and tortillas in Canada, as well as frozen bread in North America and specialty baked goods in Britain.
"Canada Bread enjoys strong relationships with key retailers in Canada and holds strong market positions in all bread categories. The company employs approximately 5,400 associates and operates 25 bakeries, as well as Canada's largest direct store delivery network for fresh bakery that reaches over 41,000 points of sale," Grupo Bimbo said.
The Canadian bakery company has annual revenues of C$1.43 billion ($1.3 billion) and earnings before interest, taxes, depreciation and amortization (EBITDA) of C$1.85 billion ($1.67 billion). EFE