Grupo Bimbo finalizes East Balt deal to form Bimbo QSR

By Gill Hyslop contact

- Last updated on GMT

Grupo Bimbo has finalized the acquisition of US bun producer East Balt Bakeries and formed a new division, Bimbo QSR, to focus on the quick service restaurant sector. Pic: ©iStock/firstwavemedia
Grupo Bimbo has finalized the acquisition of US bun producer East Balt Bakeries and formed a new division, Bimbo QSR, to focus on the quick service restaurant sector. Pic: ©iStock/firstwavemedia
Grupo Bimbo has completed the integration of East Balt Bakeries, opening a new division that will boost the Mexican bakery giant’s global growth strategy in ‘high-potential’ markets and sectors.

The company first announced it was purchasing the Chicago-based baker from One Equity Partners for $650m in July.

East Balt produces approximately 13 baked goods daily – including buns, English muffins, rolls, tortillas, bagels, artisanal bread and other baked foods – for the Quick Service Restaurant (QSR) industry.

New avenues

The acquisition has expanded Grupo Bimbo’s operations to 32 countries.

“Our entry into eight new countries represents an important step in achieving our vision of transforming the baking industry and expanding our global leadership,”​ said Daniel Servitje, chairman and CEO of Grupo Bimbo.

According to Bimbo’s CFO, Diego Gaxiola, the acquisition will drive the company’s value creation objectives.

“The approximate 3% and 5% annualized increase in Group sales and EBITDA translates directly into accretive margins, earnings per share and profitability,”​ he said.

“To fund the transaction, we are drawing down an existing committed long-term revolving credit facility and utilizing part of the resources obtained from the recent local bond issuance: BIMBO17.

“This strategy preserves the company’s financial flexibility and healthy credit profile,”​ he added.

Feeling the effects

East Balt’s results will become effective in Q4 2017 and included in North America and EAA (Europe, Asia and Africa) regions for reporting purposes.

The company operates 21 bakeries in 11 countries across the US, Europe, Asia, the Middle East and Africa.

It generated sales of approximately $420m and EBITDA of $70m in the past fiscal year.

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