The Barcelona-based foods group claims to be a market leader in Spain, with a turnover last year of €551m.
Apax, which will acquire a 75 per cent shareholding in the family-run bakery business, is considering further acquisitions in the Spanish bakery market, with a view of merging companies to increase size and market share.
"We have looked into the market and seen that bakery acquisitions seem to be high," said Oriol Pinya of the Madrid Apax office.
"Unless a company is number one or two, it has become very difficult to survive in the increasingly competitive Spanish bakery market."
"In order for growth to be realized companies either need to focus on product innovation or to increase their size though merging with other firms," he told BakeryAnd Snacks.com.
For the time being Apax will focus on expanding Panrico's product lines, where it sees significant potential due to an already well established distribution network and customer base.
Panrico, whose main products include doughnuts, pastries and sliced bread, said it was "delighted" with the acquisition plans, which will help the company achieve its ambitious goals for the future.
The equity group previously bought Kamps and Wendeln bakeries in Germany and Hubert bakery in France, which it has already divested.
Apax had recently been interested in acquiring Dutch retailer Ahold's Spanish supermarket business, but was beaten in the race by private equity firm Permira.
The acquisition of Panrico, Apax's fifth investment in Spain in the last two years, is expected to be completed in November 2005.