Embattled Aryzta’s $850m divestiture of North American bakery unit validates strategy to ‘remain independent’

The $850m price tag to purchase ANA will enable the Swiss-Irish conglomerate to significantly reduce its debt, which had skyrocketed to €1.01bn ($1.21bn) by August 2020.

Despite this, the ingredients specialist’s Board of Directors rejected a $1.01bn takeover bid of its global operation​​ by US investment firm Elliot in December, instead deciding to embark on a restructuring plan to simplify operations. The Zurich-based company then announced it had hired Houlihan Lokey and Alantra to help it offload some of its unwanted assets,​​ including its underperforming North American unit.

Simplification strategy

“This agreement represents a significant inflection point for Aryzta and vindication of our simplification strategy to the outright sale option,” ​said Aryzta AG’s chairman and interim CEO Urs Jordi.

“I want to thank our shareholders and stakeholders for their confidence and support since September, which enabled this transaction to materialise.​

“Today’s transaction delivers significant debt reduction and balance sheet strength. It now allows us to focus on delivering further operational improvements and returning to organic growth.​

“The agreed price reflects well on the underlying quality of the North American businesses, its assets, the significant recovery in performance achieved by the team and bodes well for its future performance prospects under its new owners.”​

ANA is one of the largest B2B providers of frozen baked goods in the US and Canada, manufacturing over 1,500 baked goods under branded and private labels like Otis Spunkmeyer, Oakrun Farm Bakery and La Brea Bakery for the QSR, foodservice and retail sectors. It operates 15 state-of-the-art production facilities in the US and Canada, employing a workforce of over 4,000.

ANA’s new owners

According to a statement, the deal includes 100% of ANA’s equity and assets.

Tyson Yu, CEO of ANA, added, “This is an exciting step in the evolution of our market-leading business and brands, and a strong endorsement of the hard work and commitment of our talented employees.​

“Lindsay Goldberg is renowned for its collaborative approach in partnering with management teams to build great businesses. The firm’s extensive industry experience, network of relationships, and broad operational expertise position us to maintain the highest standards for food safety and sustainability and accelerate our innovation and future growth trajectory.”​

The private equity firm has a successful history with much of the ANA business, having built and sold a predecessor to ANA in 2010.

The New York-based firm focuses on a diverse set of industries that have demonstrated resilience across economic cycles, including industrials, business, government, financial services, and healthcare in North America and Western Europe. Since 2001, it has raised more than $17bn of equity capital and has invested in over 50 platform companies and over 250 follow-on opportunities.

“We are excited to partner with the ANA management team as they execute their strategy to drive growth and create value for their customers by building on the Company’s tradition of exceptional customer service and leading product innovation,”​ said Eric Fry, partner at Lindsay Goldberg.

The transaction – which is subject to customary closing conditions – is expected to be completed by the end of Aryzta’s current 2021 financial year.

Earlier this month, the company posted H1 revenue and underlying EBITDA performance ahead of expectations, adding it is on track to deliver 25T annualised reduction in Group overhead in FY21.