Toronto / CA. (gwl) George Weston Limited (GWL) announced that it has signed a definitive agreement to sell the Weston Foods ambient bakery business to affiliated entities of Hearthside Food Solutions LLC – headquartered in Downers Grove, US-Illinois – for aggregate cash consideration of CAD 370,000,000.
«With the agreement to sell the ambient segment to Hearthside and our previously announced sale of the fresh and frozen businesses, we have two high-quality buyers that are well-positioned to carry on the proud legacy of the Weston Foods business,» said Galen G. Weston, Chairman and CEO of George Weston. «With the sale of the entire bakery business, George Weston will be focused on its market-leading Retail and Real Estate businesses going forward.»
«The Weston Foods acquisition is an ideal complement to our existing production network and business, bringing baking capacity, a roster of premier customers, expanded capabilities, and enhanced geographic coverage. These synergies benefit our current and new customers alike. We look forward to welcoming Weston Foods’ 1,100 employees into the Hearthside family.» said Chuck Metzger, Hearthside CEO.
George Weston announced on March 23, 2021, that it decided to sell its bakery segment and to focus on its Retail and Real Estate businesses. On October 26, 2021, George Weston announced that it had entered into a definitive agreement to sell its fresh and frozen bakery businesses to affiliated entities of FGF Brands Inc. for aggregate cash consideration of CAD 1.2 billion. Together with the sale of the fresh and frozen business, the sale of the ambient business represents the disposition of George Weston’s entire bakery business, for an aggregate value of CAD 1.57 billion at a combined multiple of approximately 10x the estimated 2021 EBITDA for the bakery segment. The Company expects to return the net proceeds from the transactions to shareholders through share repurchases over time. In the interim, the Company is committed to ensuring that a smooth transition plan is in place as Weston Foods continues to support its customers and workforce.
The sale of the Weston Foods ambient business is subject to compliance with the Hart-Scott Rodino Antitrust Improvements Act of 1976 and other closing conditions customary in transactions of this nature. Subject to the receipt of all regulatory approvals and satisfaction of customary transaction closing conditions, George Weston expects to close the transaction before the end of the first quarter of 2022.
Houlihan Lokey and CIBC Capital Markets are serving as financial advisors to George Weston and Mayer Brown LLP and Torys LLP are acting as legal advisors. Ropes + Gray LLP and Stikeman Elliott LLP are acting as legal advisors to Hearthside.