Sara Lee has entered into an agreement to sell its North American branded refrigerated dough products business to Ralcorp Holdings and is also intending to divest its French refrigerated dough and Spanish bakery businesses.
Sara Lee announced in May that it was looking at “strategic options” for its North American refrigerated dough business, which generated revenues in excess of $300m in 2010 from sales of private label biscuits, crescent rolls, pizza and pie crusts and toaster pastries to retailers.
The business employs approximately 700 people and operates manufacturing facilities in Forest Park, Georgia, and Carrollton, Texas.
On 9 August, the company announced that it had hammered out an agreement with Ralcorp to sell the concern for approximately $545 million.
According to Marcel Smits, chief executive officer of Sara Lee Corp, the sale “is another step forward for Sara Lee as we continue to prepare for our separation into two publicly-traded companies.
“It will better enable our North American business to focus on its branded meats and frozen desserts products,” he said.
A spokesman for Ralcorp told BakeryAndSnacks.com that this represents its “first foray into the refrigerated dough business”.
“We are excited about the addition of the refrigerated dough business to the Ralcorp family of products,” said Kevin J. Hunt, co-CEO and president of Ralcorp. “This transaction will allow Ralcorp to be a private-brand leader in the $1.8bn refrigerated dough category.”
Further sell-offs announced
Generating net sales in of approximately $3.8bn annually, Ralcorp Holdings is a US food giant with a presence in almost every category through its member companies. These include branded cereals business Post Foods, private label cereals business Ralston Foods, American Italian Pasta Company, Ralcorp Frozen Bakery, snacks and confectionery business Bremner Food Group and Carriage House, the nation’s largest supplier of private label preserves and jellies, peanut butter, table syrups and dressings. Ralcorp rejected a $4.9bn takeover bid from ConAgra Foods in May of this year.
The announcement on Tuesday was followed by the release of Sara Lee’s fourth quarter and full year 2011 results yesterday (Thurs).
In a statement issued to the press Sara Lee said that it intended to divest its Spanish bakery and French refrigerated dough businesses.
“For both, a sales process is underway and numerous bids have been received. These businesses will be reclassified to discontinued operations in the first quarter of fiscal 2012.”
It said its Australian frozen desserts business remains under strategic review, while the sale of its North American fresh bakery business to Grupo Bimbo is expected to close before the end of September.
“Through our strategic divestments, we are achieving our objective of streamlining the portfolios to provide the best foundation for strong and focused businesses moving forward.”
The Ralcorp deal is expected to close by the end of 2011.