THOMASVILLE, GA. — Flowers Foods Inc. said late Monday it will acquire Phoenix-based Holsum Bakery Inc. in a cash and stock deal. According to a June 24 filing with the Securities and Exchange Commission, the transaction is valued at $150 million, half to be paid in cash and half in newly issued Flowers common stock.
Holsum, which has annual sales of $146 million, will operate under its current name as a subsidiary of Flowers Foods, the company said.
Founded in 1881, Holsum employs 580 at two baking plants in Arizona and sells its products through independent distributors who serve retail and food service customers in Arizona, New Mexico, Southern California and southern Nevada. The company’s fresh bread and rolls are marketed under the Holsum, Aunt Hattie’s and Roman Meal brands.
Holsum has long enjoyed high esteem in the baking industry and has a history of innovation, dating back many decades. The company was the first to sell sliced bread in Arizona and the first bakery to use sanitary waxed paper wrappers.
"We are fortunate to have this fine organization merge with Flowers Foods," said George E. Deese, chairman, chief executive officer and president of Flowers Foods. "The Eisele family name is one of the oldest and most respected in the baking industry. Holsum and Flowers have similar operating strategies and business ethics. This merger of Holsum and Flowers further strengthens our operations and brings new talent to our company. We look forward to the growth opportunities the merger will provide as we strategically expand our geographic footprint and continue to build value for our shareholders."
Mr. Deese said Edward Eisele, Holsum’s president and majority owner, will continue to lead Holsum after the acquisition is completed. Mr. Eisele is the grandson of Holsum’s founder.
"Our team is pleased to become part of Flowers Foods," Mr. Eisele said. "Our companies have a shared commitment to the highest quality products, excellent customer service, and constant innovation and investments to keep our bakeries the best in our industry. It also is important to note that the culture within Flowers and Holsum is nearly identical and this will be a great fit for both organizations. We truly look forward to expanding into new geographies with an even broader product line than we have today."
With the acquisition, Flowers Foods’ geographic expansion would take a significant step forward. While the company has focused its expansion in recent years in the Midwest and the Northeast, the Holsum business would give Flowers a dominant presence in Arizona and an initial foothold in the states of California and Nevada.
The purchase would raise the number of baking plants operated by Flowers to 38.
Flowers Foods shares fell 12c to $27.69 in electronic after-hours trading on Monday night. During regular trading on Monday, shares rose 23c to close at $27.81.