THOMASVILLE, Ga. and
PHILADELPHIA, April 11, 2011 /PRNewswire/ -- Flowers Foods
(NYSE: FLO) ("Flowers") and Tasty Baking Company (NasdaqGM: TSTY)
("Tasty") today announced a definitive merger agreement whereby
Flowers will acquire all of the outstanding shares of Tasty common
stock for $4.00 per share in cash for
a total purchase price of approximately $165
million, including Tasty's existing indebtedness.
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The transaction is expected to:
- Strengthen Flowers' snack cake business through the addition of
the iconic Tastykake snack cake brand;
- Expand Flowers' geographic reach, immediately adding more than
24 million consumers who are contiguous with Flowers' current
footprint;
- Add two highly efficient bakeries with additional capacity to
support growth;
- Generate significant operating synergies through additional
revenue and cost-saving opportunities;
- Add approximately $115 million to $125
million to Flowers' 2011 sales, contribute approximately
$10 million to $12 million to
Flowers' 2011 EBITDA, and be neutral to slightly accretive to 2011
earnings per share, excluding one-time costs of the transaction;
and
- Contribute approximately $210 million to
$225 million to Flowers' 2012 sales, contribute
approximately $25 million to $30
million to 2012 EBITDA, and contribute approximately
$.06 to $.09 per diluted share.
Under the terms of the agreement, Flowers will commence a tender
offer to acquire all of the outstanding shares of Tasty common
stock for $4.00 per share in cash.
The transaction is expected to close during the second quarter of
2011 and is subject to customary closing conditions and approvals,
as well as a majority of the outstanding shares of Tasty common
stock being validly tendered and not withdrawn in the tender offer.
The agreement has been unanimously approved by the Boards of
Directors of both companies. Flowers intends to fund the
transaction through cash-on-hand and credit facilities. There is no
financing condition to the offer. Upon completion of the
transaction, Tasty will become part of Flowers'
direct-store-delivery segment.
"We are very pleased with the addition of Tasty to Flowers,"
said George E. Deese, Flowers Foods'
Chairman and CEO. "Tasty brings a talented, committed team of
employees, two highly efficient bakeries, the iconic Tastykake
brand, a solid sales base, and an effective distribution system.
The merger will expand Flowers' geographic reach and bring new
consumers, new customers, and new opportunities for further growth.
It will provide the opportunity to add Tastykake products to
Flowers' existing direct-store-delivery network. With the addition
of Tasty, our snack cake business will be significantly enhanced
and we will have a new platform to grow our Nature's Own
brand as we make other acquisitions that add needed production
capacity for breads, buns, and rolls.
"Tasty and Flowers have a similar heritage and share the same
core values of integrity, service, quality, and commitment," Deese
continued. "We are delighted to welcome Tasty's 740 dedicated
employees and 413 independent sales distributors to the Flowers
Foods family. Our plans are to invest in the combined business for
sustainable and profitable growth, and they will be an important
part of Flowers' ongoing success."
Charles P. Pizzi, Tasty's
President and CEO, said, "This merger with Flowers will create
value for Tasty's shareholders, employees, and the Philadelphia community. It will provide
immediate cash value to our stockholders at an attractive premium
over the current trading value. We believe the combination of Tasty
with Flowers will create a company with long-term advantages for
our employees, customers, suppliers, independent sales
distributors, and other constituents. Flowers also shares Tasty's
commitment to the communities in which it operates. We have a deep
respect for Flowers' approach to managing its business and
employees, and we look forward to working closely with the Flowers
team to complete the merger as quickly as possible and to ensure a
smooth transition."
Expected Benefits of the Flowers and Tasty
Combination
The combination of Flowers and Tasty leverages their
complementary product offerings and market strengths and unites two
companies with rich traditions of delivering quality and value to
their customers and consumers. This combination is expected to
result in:
- Creation of a larger business with a complementary portfolio of
high-quality branded and store-brand bakery products;
- A deeper penetration of the snack cake category, which should
strengthen customer relationships over a broader geography;
- The ability to grow the Tastykake brand in its current markets
and provide new opportunities for Tastykake's independent sales
distributors;
- The opportunity to expand distribution of the Tastykake brand
through the majority of Flowers' 4,000 independent distributors,
whose existing territories have access to 53 percent of the U.S.
population;
- The addition of two highly efficient bakeries strategically
located in the heart of the Northeast corridor. The available
snack cake capacity in these state-of-the-art facilities provides a
platform for further profitable growth;
- The immediate addition of approximately 24 million consumers
who are contiguous to Flowers Foods' existing geographic footprint,
which will increase Flowers' market access to about 61 percent of
the U.S. population through its direct-store-delivery systems;
- The potential to expand the reach of Flowers' Nature's
Own brand through Tasty's marketing areas as Flowers continues
to expand and acquire additional production capacity for bread,
buns and rolls; and
- A strong, combined financial profile, with an anticipated sales
contribution from the transaction of $115
million to $125 million for 2011, contributing approximately
$10 million to $12 million to EBITDA
with the effect on 2011 earnings per share expected to be neutral
to slightly accretive, excluding any one-time expenses. In
2012, we anticipate Tasty to contribute approximately $210 million to $225 million to sales with an
expected $25 million to $30 million
EBITDA contribution and anticipate the transaction to be accretive
approximately $.06 to $.09 per
diluted share.
"We take a very deliberate approach to selecting acquisitions,
focusing on strong brands and premium products that extend our
capabilities and geographic reach. We believe Tasty is highly
consistent with our acquisition strategy and also offers
substantial synergy potential that we expect will generate a strong
financial return for our shareholders," said Deese.
Flowers has experience integrating acquisitions, having
completed more than 100 acquisitions since listing publicly in
1968, including 11 in the past decade. Upon the completion of the
tender offer and subsequent merger, Flowers and Tasty will work
closely to achieve a successful integration and to realize the
benefits of the transaction.
About Flowers Foods
Founded in 1919 and headquartered in Thomasville, Ga., Flowers Foods, with
$2.6 billion in annual sales, is one
of the nation's leading producers and marketers of packaged bakery
foods for retail and foodservice customers. Among the company's top
brands are Nature's Own, Whitewheat, Cobblestone
Mill, Blue Bird, and Mrs. Freshley's. Flowers
operates 39 bakeries that are among the most efficient in the
baking industry. Flowers Foods produces, markets, and distributes
fresh bakery products that are delivered to customers daily through
a direct-store-delivery system serving the Southeast, Mid-Atlantic,
and Southwest as well as select markets in California and Nevada. The company also produces and
distributes fresh snack cakes and frozen breads and rolls
nationally through warehouse distribution. For more information,
visit www.flowersfoods.com.
About Tasty Baking Company
Tasty Baking Company (NasdaqGM: TSTY), founded in 1914 and
headquartered in Philadelphia,
Pa., is one of the country's leading bakers of snack cakes,
pies, cookies, and donuts. The company has manufacturing
facilities in Philadelphia and
Oxford, Pa. The company offers
more than 100 products under the Tastykake brand name. For more
information on Tasty Baking Company, visit www.tastykake.com.
Important Information about the Tender Offer
This press release is for informational purposes only and does
not constitute an offer to purchase nor a solicitation of an offer
to sell any securities of Tasty. Flowers has not commenced the
tender offer for the shares of Tasty common stock described in this
press release. The solicitation and offer to purchase shares of
Tasty common stock will only be made pursuant to a tender offer
statement on Schedule TO and related exhibits, including the offer
to purchase, letter of transmittal, and other related
documents.
Upon commencement of the tender offer, Flowers will file with
the SEC a tender offer statement on Schedule TO and related
exhibits, including the offer to purchase, letter of transmittal,
and other related documents. In addition, Tasty will file with the
SEC a tender offer solicitation/recommendation statement on
Schedule 14D-9 with respect to the tender offer. These documents
will contain important information, including the terms and
conditions of the tender offer. Shareholders of Tasty are urged to
read each of these documents and any amendments to these documents
carefully when they are available prior to making any decisions
with respect to the tender offer.
Tasty shareholders will be able to obtain free copies of these
materials (when available) and other documents filed with the SEC
by Flowers or Tasty through the web site maintained by the SEC at
www.sec.gov. In addition, Schedule TO and related exhibits,
including the offer to purchase, letter of transmittal, and other
related documents may be obtained (when available) for free by
contacting Flowers at 1919 Flowers Circle, Thomasville, GA 31757 and the Schedule 14D-9
may be obtained (when available) for free by contacting Tasty at
Navy Yard Corporate Center, Three Crescent Drive, Suite 200,
Philadelphia, PA 19112.
Forward Looking Statements
Statements contained in this press release that are not
historical facts are forward-looking statements. All
forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ from those projected.
Other factors that may cause actual results to differ from the
forward-looking statements contained in this release and that may
affect the company's prospects in general include, but are not
limited to, (a) competitive conditions in the baked foods industry,
including promotional and price competition, (b) changes in
consumer demand for our products, (c) the success of productivity
improvements and new product introductions, (d) a significant
reduction in business with any of our major customers including a
reduction from adverse developments in any of our customers'
businesses, (e) fluctuations in commodity pricing, (f) our ability
to fully integrate recent acquisitions into our business, (g) our
ability to achieve cash flow from capital expenditures and
acquisitions and the availability of new acquisitions that build
shareholder value, and (h) our ability to successfully consummate
the merger transaction. In addition, our results may also be
affected by general factors such as economic and business
conditions (including the baked foods markets), interest and
inflation rates and such other factors as are described in the
company's filings with the Securities and Exchange Commission.
SOURCE Flowers Foods
