Ralcorp confirmed this week it had closed the $545m deal to buy Sara Lee’s Refrigerated Dough Business.
The refrigerated dough business generated revenues over $300m in 2010 and focuses on toaster pastries, crescent rolls, pizza and pie crusts, basic and specialty biscuits that are largely sold to food retailers.
"We are pleased to complete this transaction, which enhances Ralcorp's private-brand offerings and immediately positions Ralcorp as a leader in the $1.8 billion refrigerated dough category," said Kevin J. Hunt, co-CEO and president of Ralcorp.
Following the announcement, Ralcorp’s shares slightly rose up to $77.05 but remained stable overall.
In a statement, Hunt said: "The acquisition of this cash generating refrigerated dough business will make important contributions to Ralcorp's earnings following the planned separation of the Post cereals business and represents the continuation of our strategy of enhancing shareholder value through private-brand acquisitions”.
About 700 people work for the refrigerated dough business. The company has manufacturing and distribution facilities in Carrollton, Texas and Forest Park, Georgia. It will operate within the Ralcorp frozen Bakery products unit.
Ralcorp is in its process of selling off its Post cereals business and hopes to complete the transaction by the end of the year.