Ralcorp Holdings Declares Agreement to Purchase Cottage Bakery, Inc.
Ralcorp has agreed to pay $170.8 million in cash for all the stock in the company. In January 2007, Ralcorp will purchase the real estate associated with the business.
19/10/06 Ralcorp Holdings, Inc. announced that it has signed a definitive agreement to purchase Cottage Bakery, Inc., a leading manufacturer of frozen par-baked breads and frozen dough sold in the retail and foodservice channels. Ralcorp has agreed to pay $170.8 million in cash for all the stock in the company. In January 2007, Ralcorp will purchase the real estate associated with the business. Cottage Bakery had gross sales of $125 million for the year ended June 30, 2006. Based upon Cottage Bakery's 2006 results and Ralcorp's initial assessment of Cottage Bakery's intangible asset valuation and related amortization, Ralcorp anticipates the transaction will add $.09 to $.12 to diluted earnings per share on a full fiscal year basis.
The transaction is expected to close within thirty days, subject to customary conditions including the Hart-Scott-Rodino waiting period. Ralcorp will finance the acquisition primarily through borrowings under its existing $150 million revolving credit facility.
Cottage Bakery will become a part of Ralcorp's Frozen Bakery Product segment. Cottage Bakery's headquarters will remain in Lodi, California with its management group. Cottage Bakery operates one manufacturing facility and employs approximately 690 people.
Cottage Bakery is currently owned by Terry Knutson, who has grown Cottage Bakery from a small family bakery into a leading producer of the highest quality artisan breads, cakes, cookies and frozen dough products. After closing, Mr. Knutson will remain President of Cottage Bakery.
Ralcorp Holding, Inc. stated, "We are excited about the addition of Cottage Bakery and its superior management team. Cottage Bakery will allow Ralcorp to continue its growth in frozen bakery products."
Terry Knutson, Owner and President of Cottage Bakery, said, "This acquisition enhances Cottage Bakery's plans to continue growing and improving the business. We will continue to focus on our solid foundation: delivering superior levels of customer service, developing high quality new products, and improving and expanding manufacturing operations."
