US-Swiss food company Aryzta Group has signed an agreement to sell its North American business to an affiliate of US private equity firm Lindsay Goldberg for US$850 million.
Aryzta North America (ANA) provides breads, sweet and savory baked goods, and snacks to leading customers in the quick-service restaurant, foodservice, and retail markets across the U.S. and Canada.
With over 1,500 unique products, the Company has one of the broadest portfolios in the industry, including both private label and branded offerings under the Otis Spunkmeyer, La Brea Bakery, and Oakrun Farm Bakery brands.
ANA operates 15 state-of-the-art production facilities with over 4,000 employees in the U.S. and Canada.
According to a statement from the company, the deal includes 100% of the equity and assets of Aryzta’s North American business in the USA and Canada.
The move is part of the company’s efforts to raise funds to reduce its debt levels which as at August 2020, had skyrocketed to €1.01 billion (approximately US$1.21 billion).
The bakery group says the agreement validates “the board’s strategy to remain independent” and “delivers significant debt reduction and balance sheet strength”.
The company’s latest deal comes after it offloaded its North American take and bake pizza unit to private equity firm Brynwood Partners.
Chairman and interim CEO of Aryzta, Urs Jordi, said: “This agreement represents a significant inflection point for Aryzta and vindication of our simplification strategy to the outright sale option.
Jordi added that sale allows the Zurich-based company to focus on delivering further operational improvements and returning to organic growth.
Last year, US investment firm Elliott made an attempt to take over the global operations of the Swiss food ingredients company, tabling a US$734million (about US$1.016 billion) offer bid to the company’s board.
Despite being in negotiations with the investment firm since October, Aryzta rejected the takeover bid and instead decided to embark on a restructuring plan to simplify operations
The sale for a total enterprise value of US$850 million is a great return on value compared to the US$1.016 billion takeover offer from US investment firm Elliott which it rejected in December.
“The agreed price reflects well on the underlying quality of the North American businesses, its assets, the significant recovery in performance achieved by the team and bodes well for its future performance prospects under its new owners,” added Jordi.
The transaction, which is subject to customary closing conditions, is expected to be completed by the end of Aryzta’s current 2021 financial year.
Lindsay Goldberg, ANA’s new owner, has a deep familiarity and a successful history with much of the ANA business, having built and sold a predecessor to ANA in 2010.
“ANA is one of the leading suppliers of high-quality baked goods in the U.S. and Canada, and we look forward to partnering with management to continue ANA’s tradition of serving millions of consumers,” said Russell Triedman, Managing Partner of Lindsay Goldberg.
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