IAWS to Buy Otis Spunkmeyer for $340m
The acquisition will increase IAWS' sales in US by 200 pct to over US$530 mln. It is expected to be earnings enhancing from end of October, the scheduled date of completion.
16/10/06 Irish based IAWS Group, plc is to acquire Otis Spunkmeyer Holdings, Inc, a leading US specialty baked goods business, from the private equity firm of Code Hennessy & Simmons and the current management team of Otis Spunkmeyer. Based on a closing enterprise value of $561 million, the consideration for the equity is circa $340m with an additional payment to stock and option holders contingent on the achievement of agreed performance milestones, up to a maximum of $25m. The acquisition is being funded by additional debt facilities.
The acquisition will increase IAWS' sales in US by 200 pct to over 530 mln usd. It is expected to be earnings enhancing from end of October, the scheduled date of completion.
Otis Spunkmeyer is a major premium freshly baked goods brand in its US market categories. An iconic brand, it has strong recognition and awareness across a national customer base in the foodservice and retail channels. Otis generated revenue of $336m for the year ended 31 December 2005, EBITDA of $48m and operating profit of $29.1m ($35.3m when adjusted for intangible amortisation). From 2001 to 2005 Otis achieved a net sales compound annual growth rate in excess of 9 per cent. Total assets (excluding goodwill and intangibles), at acquisition will be c.$50m.
