According to Bimbo’s CEO, Daniel Servitje, the acquisition will benefit the bakery giant’s strategy to focus on high-growth markets.
US bun supplier East Balt was founded in 1955 with a single bakery in Chicago, Illinois. Today, it operates 21 bakeries, spread throughout the US, Europe, Asia, the Middle East and Africa.
Owned by One Equity Partners (OEP), the private investment arm of JPMorgan Chase & Co, East Balt was sold to bakery giant Grupo Bimbo in a deal worth $650m.
The transaction is expected to be finalised in the second half of 2017. It will be funded using an existing long-term revolving credit facility, according to Bimbo’s CFO Guillermo Quiroz.
Doubling its growth
OEP bought the bun and artisan roll business in 2012.
During its ownership, OEP almost doubled the company’s EBITDA to $70m, completed three acquisitions and expanded its bakeries to Rome, Paris and China.
The baker generated annual sales of approximately $420m in the 12 months to the end of June.
East Balt - which employs around 2,200 people - produces approximately 13 million baked goods daily, including buns, English muffins, rolls, tortillas, bagels, artisanal breads and other baked goods, mainly for the quick service restaurant sector.
“East Balt brings a geographically diverse and highly scalable platform in the foodservice segment, complementing our current business within this channel,” said Servitje.
Grupo Bimbo is the largest baking company in the world (IBISWorld Global Bakery Goods Manufacturing Report), generating $13.5bn in sales in 2016.