George Weston divests North America bakery business to FGF Brands for US$1.2 billion

CANADA — George Weston, a Canadian-based food processing and distribution company, has announced plans to sell Weston Foods’ fresh and frozen bakery business to Toronto-based food company FGF Brands Inc.  

The US$1.2 billion purchase price represents approximately a 10x multiple on the 2021 estimated EBITDA of the business that is being divested. 

Weston Foods’ fresh and frozen bakery businesses serve retail and foodservice customers with packaged fresh bread and rolls as well as frozen and artisan bread and rolls, cakes, donuts, pies, and alternatives throughout Canada and the United States.  

The company produces private label products and many well-known brands, including Wonder, Ace Bakery, Country Harvest, D’Italiano, Casa Mendosa, Dave’s Killer Bread and Gadoua. 

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FGF’s acquisition includes the fresh and frozen bakery businesses that comprised approximately 75% of Weston Foods’ net sales in 2020. 

The sale however does not include cookies, cones, crackers, and wafers, which George Weston said it continues to be committed to selling. 

“We are thrilled to be acquiring the fresh and frozen businesses of Weston Foods, a Canadian company with over 100 years of baking experience,” said Tejus Ajmera, co-founder of FGF.  

“And we look forward to building on that legacy by investing in people, facilities, and innovation across our entire operations, in collaboration with Weston Foods president Luc Mongeau and his team.” 

Founded in 2004, FGF Brands is a Canadian, family-owned baking company that combines innovations in robotics, AI systems and supply chain solutions with a commitment to making quality food with the cleanest possible ingredients. 

Ojus Ajmera, co-founder of FGF noted that the acquisition of Weston Foods allows his company “to bring that same drive for disruption to more teams, brands, and customers than ever before, as we pursue our vision to become the world’s greatest baker.” 

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A greater focus on retail and real estate

For George Weston, the transaction comes seven months after the company announced its intent to sell its bakery segment to focus on its retail and real estate businesses.  

The company said it expects to return the net proceeds from the transaction to shareholders through share repurchases over time.  

In the interim, the focus will be on ensuring that a smooth transition plan is in place as Weston Foods continues to support its customers and workforce. 

The decision to sell Weston Foods comes a little more than 12 years after Dunedin Holdings, a subsidiary of George Weston, sold its US fresh bread and baked foods business to Grupo Bimbo SAB de CV for US$2.5 billion.  

The transaction in 2009 included the Arnold, Brownberry, Entenmann’s, Freihofer, Stroehmann, and Thomas’ brand names in the United States.  

Interbake Foods, which produces biscuits, cookies, cones, and wafers, and Maplehurst Bakeries, which produces and distributes frozen bakery products were not included in the sale and continue to be part of the George Weston business. 

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