FLOWERS FOODS, INC. TO ACQUIRE SIMPLE MILLS
Flowers Foods (NYSE: FLO) has announced a definitive agreement to acquire Simple Mills for $795 million in cash. Simple Mills, founded in 2012, is a market-leading natural brand offering premium better-for-you crackers, cookies, snack bars, and baking mixes, with estimated 2024 net sales of $240 million, representing 14% growth from the previous year.
The acquisition expands Flowers' exposure to better-for-you and attractive snacking segments, with Simple Mills products available in over 30,000 stores nationwide. The transaction is expected to be immediately accretive to net sales and adjusted EBITDA growth and margins. Upon closing in Q1 2025, Simple Mills will operate as an independent subsidiary, maintaining its operations in Chicago and Mill Valley, with founder Katlin Smith continuing as CEO.
The deal will be funded through a $795 million term loan from Royal Bank of Canada, with proforma total net debt estimated at $1.9 billion and a net debt-to-EBITDA ratio expected between 3.1x to 3.3x.
Flowers Foods (NYSE: FLO) ha annunciato un accordo definitivo per acquisire Simple Mills per 795 milioni di dollari in contante. Simple Mills, fondata nel 2012, è un marchio leader nel mercato di prodotti naturali che offre cracker, biscotti, barre di snack e mix per dolci di alta qualità, con vendite nette stimate per il 2024 di 240 milioni di dollari, che rappresentano una crescita del 14% rispetto all'anno precedente.
L'acquisizione espande l'esposizione di Flowers ai segmenti di snack salutari e attraenti, con i prodotti di Simple Mills disponibili in oltre 30.000 negozi a livello nazionale. Si prevede che la transazione sia immediatamente accretiva per la crescita delle vendite nette e dell'EBITDA rettificato e per i margini. Al momento della chiusura nel primo trimestre del 2025, Simple Mills opererà come una filiale indipendente, mantenendo le sue operazioni a Chicago e Mill Valley, con la fondatrice Katlin Smith che continuerà a ricoprire il ruolo di CEO.
L'affare sarà finanziato attraverso un prestito a termine di 795 milioni di dollari dalla Royal Bank of Canada, con un debito netto totale proforma stimato in 1,9 miliardi di dollari e un rapporto debito netto/EBITDA previsto tra 3,1x e 3,3x.
Flowers Foods (NYSE: FLO) ha anunciado un acuerdo definitivo para adquirir Simple Mills por 795 millones de dólares en efectivo. Simple Mills, fundada en 2012, es una marca líder en el mercado de productos naturales que ofrece galletas, galletas saladas, barras de snacks y mezclas para repostería de alta calidad, con ventas netas estimadas para 2024 de 240 millones de dólares, lo que representa un crecimiento del 14% respecto al año anterior.
La adquisición amplía la exposición de Flowers a segmentos de snacks más saludables y atractivos, con productos de Simple Mills disponibles en más de 30,000 tiendas a nivel nacional. Se espera que la transacción sea inmediatamente positiva para el crecimiento de las ventas netas y el EBITDA ajustado, así como para los márgenes. Al cierre en el primer trimestre de 2025, Simple Mills operará como una subsidiaria independiente, manteniendo sus operaciones en Chicago y Mill Valley, con la fundadora Katlin Smith continuando como CEO.
El acuerdo se financiará a través de un préstamo a plazo de 795 millones de dólares del Royal Bank of Canada, con una deuda neta total proforma estimada en 1.9 mil millones de dólares y un ratio de deuda neta a EBITDA esperado entre 3.1x y 3.3x.
플라워스 푸드(Floors Foods) (NYSE: FLO)는 심플 밀스(Simple Mills)를 현금 7억 9500만 달러에 인수하기 위한 최종 계약을 발표했습니다. 2012년에 설립된 심플 밀스는 프리미엄 건강 간식 크래커, 쿠키, 스낵바 및 베이킹 믹스를 제공하는 자연식품 브랜드로, 2024년 예상 순매출은 2억 4000만 달러로 전년 대비 14% 성장할 것으로 보입니다.
이번 인수로 플라워스는 보다 건강한 매력적인 간식 부문에 대한 노출을 늘리게 되며, 심플 밀스 제품은 전국 30,000개 매장에서 구매할 수 있습니다. 이 거래는 순매출과 조정 EBITDA 성장 및 마진에 즉각적으로 긍정적인 영향을 미칠 것으로 예상됩니다. 2025년 1분기 마감 시 심플 밀스는 독립적인 자회사로 운영되며, 시카고와 밀 밸리에서 계속 운영할 것입니다. 창립자 캣린 스미스는 CEO로 계속 재직합니다.
이번 거래는 캐나다 왕립은행(Royal Bank of Canada)으로부터 7억 9500만 달러의 기간 대출을 통해 자금을 조달할 것이며, 예상되는 총 순 부채는 19억 달러로, 순 부채 대 EBITDA 비율은 3.1배에서 3.3배 사이로 예상됩니다.
Flowers Foods (NYSE: FLO) a annoncé un accord définitif pour acquérir Simple Mills pour 795 millions de dollars en espèces. Simple Mills, fondée en 2012, est une marque naturelle leader sur le marché qui propose des crackers, des biscuits, des barres de snacks et des mélanges pour pâtisserie de qualité supérieure, avec des ventes nettes estimées à 240 millions de dollars pour 2024, représentant une croissance de 14 % par rapport à l'année précédente.
L'acquisition élargit l'exposition de Flowers aux segments de snacking sains et attrayants, les produits de Simple Mills étant disponibles dans plus de 30 000 magasins à travers le pays. La transaction devrait être immédiatement bénéfique pour la croissance des ventes nettes ainsi que pour l'EBITDA ajusté et les marges. À la clôture du premier trimestre 2025, Simple Mills fonctionnera comme une filiale indépendante, en maintenant ses opérations à Chicago et Mill Valley, la fondatrice Katlin Smith continuant en tant que PDG.
L'accord sera financé par un prêt à terme de 795 millions de dollars de la Royal Bank of Canada, avec une dette nette totale pro forma estimée à 1,9 milliard de dollars et un ratio de dette nette par rapport à l'EBITDA prévu entre 3,1x et 3,3x.
Flowers Foods (NYSE: FLO) hat eine endgültige Vereinbarung zur Übernahme von Simple Mills für 795 Millionen US-Dollar in bar bekannt gegeben. Simple Mills, gegründet im Jahr 2012, ist eine marktführende, natürliche Marke, die Premium-Snacks wie Cracker, Kekse, Riegel und Backmischungen anbietet, mit einem geschätzten Nettoverkaufsvolumen von 240 Millionen US-Dollar im Jahr 2024, was einem Wachstum von 14% gegenüber dem Vorjahr entspricht.
Die Übernahme erweitert die Präsenz von Flowers in den Bereichen gesunde und ansprechende Snacks, wobei die Produkte von Simple Mills in über 30.000 Geschäften landesweit erhältlich sind. Es wird erwartet, dass die Transaktion sofort positive Auswirkungen auf den Nettovertrieb sowie auf das Wachstum und die Margen von EBITDA hat. Nach dem Abschluss im ersten Quartal 2025 wird Simple Mills als unabhängige Tochtergesellschaft agieren und die Geschäfte in Chicago und Mill Valley fortführen, wobei die Gründerin Katlin Smith weiterhin als CEO tätig sein wird.
Die Finanzierung der Transaktion erfolgt über ein Darlehen von 795 Millionen US-Dollar von der Royal Bank of Canada, wobei die proforma Gesamtschulden auf etwa 1,9 Milliarden US-Dollar geschätzt werden, und das Verhältnis von Nettoschulden zu EBITDA wird voraussichtlich zwischen 3,1x und 3,3x liegen.
- Immediate accretion to net sales and adjusted EBITDA growth and margins
- Acquisition adds $240 million in annual sales with 14% growth rate
- Expands distribution network to over 30,000 stores nationwide
- Increases branded retail sales to 66% of total net sales
- Diversifies portfolio into growing better-for-you snacking segment
- Significant debt increase with $795 million term loan financing
- Higher leverage with net debt-to-EBITDA ratio rising to 3.1x-3.3x
Insights
This <money>$795 million</money> acquisition of Simple Mills represents a strategic pivot for Flowers Foods into the premium better-for-you snacking segment. The deal metrics are compelling - Simple Mills' <money>$240 million</money> revenue with <percent>14%</percent> growth implies a 3.3x revenue multiple, which is reasonable for a high-growth natural foods brand. The transaction structure using term loan financing while maintaining investment grade rating demonstrates prudent financial engineering.
The post-acquisition proforma leverage ratio of 3.1x-3.3x is manageable given Simple Mills' strong margins and growth profile. The deal immediately enhances Flowers' portfolio mix, increasing branded retail sales to <percent>66%</percent> of total revenue. Maintaining Simple Mills as an independent subsidiary with the existing management team mitigates integration risk and preserves brand authenticity.
Simple Mills' leadership position in natural crackers and strong presence across 30,000 retail locations provides Flowers Foods with immediate scale in premium better-for-you snacking. The brand's nutrient-dense formulations using nut, seed and vegetable flours create meaningful differentiation in an increasingly health-conscious market. The acquisition perfectly complements Flowers' existing portfolio of Dave's Killer Bread and Canyon Bakehouse, establishing a powerful better-for-you platform.
The deal unlocks significant distribution synergies through Flowers' extensive DSD network while preserving Simple Mills' premium positioning. With only <money>$240 million</money> in current sales despite category leadership, there's substantial whitespace for expansion through increased distribution depth, velocity improvements and category extensions.
This acquisition transforms Flowers Foods' growth profile and margin structure. Simple Mills' premium positioning and clean-label credentials command superior margins, which will be immediately accretive to Flowers' consolidated EBITDA margins. The <money>$795 million</money> cash consideration funded through term loan maintains financial flexibility for future investments while leveraging the current low-rate environment.
The projected earnings accretion by 2026 suggests confidence in achieving both revenue and cost synergies. Flowers' track record of successfully scaling better-for-you acquisitions like Dave's Killer Bread provides a proven playbook for accelerating Simple Mills' growth while protecting brand equity. The deal strategically diversifies revenue streams and reduces exposure to traditional bread categories.
Premium brand of better-for-you crackers, cookies, snack bars, and baking mixes expected to spur growth and diversify revenue base
- Enhances Flowers' growth by adding a scaled, better-for-you snacking platform that is successfully penetrating mainstream consumers and offers significant white space for future growth
- Diversifies category exposure, bolstering Flowers' exposure to better-for-you and attractive snacking segments through the addition of Simple Mills' market-leading products, which are meaningfully outpacing category growth
- Strengthens Flowers' financial profile with the transaction expected to be immediately accretive to net sales1 and adjusted EBITDA2 growth and adjusted EBITDA margins3 on a proforma basis4
- The company will discuss the transaction during a conference call today at 8:30 a.m. Eastern Time
Founded in 2012 by Katlin Smith, Simple Mills is a market-leading natural brand offering premium better-for-you crackers, cookies, snack bars, and baking mixes. Built upon the belief that food has the power to spark impactful change, Simple Mills' mission is to revolutionize the way food is made to positively impact people and the planet. The brand's stunningly simple ingredients, pioneering use of nutrient-dense nut, seed, and vegetable flours, and exceptional taste have cultivated unmatched brand love and loyalty among natural and mainstream consumers alike. Simple Mills products are available nationwide across more than 30,000 natural and conventional stores. Simple Mills is estimated to have generated 2024 net sales of
"We are incredibly excited to welcome the Simple Mills team to Flowers," said Ryals McMullian, chairman and CEO of Flowers Foods. "With leading market positions and abundant white space for future growth, Simple Mills perfectly fits our strategy of adding compelling brands in better-for-you segments that complement and diversify our existing portfolio. Equally important, the brand's mission aligns with Flowers' values centered on honesty and integrity, respect and inclusion, and sustainability. Katlin and the Simple Mills team have built a remarkable business, and we look forward to collaborating with them to generate continued growth while preserving the brand's integrity and staying true to its unmatched quality and taste."
Katlin Smith, founder and CEO of Simple Mills, commented, "This transaction marks the beginning of a new phase of growth for Simple Mills and we are thrilled to join the Flowers family. I am extremely proud of our talented team and the strong brand we've built with the support of our valued partners and loyal customers. With Flowers' resources, we will be well positioned to broaden distribution, accelerate innovation, and amplify brand awareness, while advancing our mission. Flowers has a strong track record of fostering growth in its acquired companies while stewarding and protecting their brand promise. I cannot imagine a better partner for Simple Mills and the team, and I look forward to working alongside Flowers to build upon our strong history of growth."
Compelling Strategic Rationale:
Enhances growth prospects
- Adds a scaled, better-for-you snacking platform, led by a seasoned management team, that is successfully penetrating mainstream consumers and offers significant white space for future growth
- Enables future growth of the Simple Mills brand by expanding distribution, accelerating innovation, increasing velocities, and gaining access to new segments and categories
- Leverages Flowers' demonstrated ability to grow acquired companies in the better-for-you space
Diversifies category exposure
- Bolsters Flowers' growing position in better-for-you and attractive snacking categories through the addition of Simple Mills' market-leading products, which are meaningfully outpacing category growth
- Enhances portfolio strategy, increasing Flowers' proforma 2024 branded retail sales as a percentage of total net sales to approximately
66% - Simple Mills authenticity and brand strength provide opportunity to extend across multiple snacking categories
Attractive financial profile
- Expected to be immediately accretive to net sales and adjusted EBITDA2 growth and adjusted EBITDA margins3 on a proforma basis4
- Expected to be accretive to Flowers' earnings per share in 2026
Transaction Details:
- Flowers has entered into a definitive agreement to acquire Simple Mills for
$795 million - Flowers has entered into a binding commitment letter for a
$795 million $1.9 billion - The transaction is subject to customary regulatory approval and closing conditions and is anticipated to close in the first quarter of 2025
- Upon closing, Simple Mills will operate as an independent subsidiary of Flowers Foods and continue to be led by founder and CEO Katlin Smith and her leadership team. Simple Mills will maintain its operations in
Chicago, Illinois andMill Valley, California . - RBC Capital Markets LLC acted as exclusive financial advisor and Jones Day acted as legal counsel to Flowers Foods in this transaction. Piper Sandler and Centerview Partners served as the financial advisors and Ropes & Gray LLP served as legal counsel to Simple Mills in this transaction. Royal Bank of Canada is acting as administrative agent and sole bookrunner on the term loan.
Transaction Webcast:
The company will host a live webcast to discuss the transaction today at 8:30 a.m. Eastern Time. Access to the webcast, along with this press release and a supporting slide presentation, will be available and archived on the investors page of flowersfoods.com.
About Flowers Foods
Headquartered in
FLO-IR FLO-CORP
About Simple Mills
Founded in 2012, Simple Mills is a leading provider of better-for-you crackers, cookies, snack bars, and baking mixes made with simple and nutritious high-quality ingredients that deliver extraordinary taste. The Company has disrupted center-aisle grocery categories to become the leading cracker, cookie, and baking mix brand in the natural channel, and the leading natural cracker brand in MULO with distribution in over 30,000 stores nationwide. Its mission is to revolutionize the way food is made to nourish people and planet. For more information, visit www.simplemills.com.
(1) Any reference to sales refers to net sales inclusive of allowances and deductions against gross sales.
(2) Earnings before interest, taxes, depreciation & amortization, adjusted for matters affecting comparability.
(3) Earnings before interest, taxes, depreciation & amortization, adjusted for matters affecting comparability, as a percentage of net sales.
(4) No reconciliation of expected adjusted EBITDA to net income or the expected adjusted EBITDA margin to net income margin is included in this presentation because the company is unable to quantify certain amounts that would be required to be included in the GAAP measure without unreasonable efforts. In addition, the company believes such reconciliation would imply a degree of precision that would be confusing or misleading to investors.
(5) Net debt excludes lease liabilities; net debt equals Total Debt, less cash and cash equivalents.
(6) No reconciliation of net debt to Total Debt is included in this presentation because the company is unable to quantify certain amounts that would be required to be included in the GAAP measure without unreasonable efforts. In addition, the company believes such reconciliation would imply a degree of precision that would be confusing or misleading to investors.
Forward-Looking Statements
Statements contained in this press release and certain other written or oral statements made from time to time by Flowers Foods, Inc. (the "company", "Flowers Foods", "Flowers", "us", "we", or "our") and its representatives that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to current expectations regarding our and Simple Mills' business and our and Simple Mills' future financial condition and results of operations, and include statements regarding the anticipated timing and financial and other benefits of the proposed acquisition, and are often identified by the use of words and phrases such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," "will," "would," "is likely to," "is expected to" or "will continue," or the negative of these terms or other comparable terminology. These forward-looking statements are based upon assumptions we believe are reasonable. Forward-looking statements are based on current information and are subject to risks and uncertainties that could cause our actual results to differ materially from those projected. Certain factors that may cause actual results, performance, liquidity, and achievements to differ materially from those projected are discussed in our Annual Report on Form 10-K for the year ended December 30, 2023 (the "Form 10-K") and our Quarterly Reports on Form 10-Q (the "Form 10-Qs") filed with the Securities and Exchange Commission ("SEC") and may include, but are not limited to, (a) our ability to satisfy the conditions precedent to the consummation of the proposed acquisition on the expected timeline or at all, (b) our ability to achieve the anticipated timing and financial and other benefits of the proposed acquisition, including anticipated synergies, (c) our ability to integrate the businesses following the acquisition, (d) our management team's ability to focus on ongoing business operations and not be distracted by the proposed acquisition, (e) expectations regarding Simple Mills' strategies and future financial performance, including its future business plans, expansion plans or objectives, prospective performance and opportunities, revenues, products and services, pricing, operating expenses, market trends, liquidity, cash flows and uses of cash and capital expenditures, (f) unexpected changes in any of the following: (1) general economic and business conditions; (2) the competitive setting in which we operate, including advertising or promotional strategies by us or our competitors, as well as changes in consumer demand; (3) interest rates and other terms available to us on our borrowings; (4) supply chain conditions and any related impact on energy and raw materials costs and availability and hedging counter-party risks; (5) relationships with or increased costs related to our employees and third-party service providers; (6) laws and regulations (including environmental and health-related issues); and (7) accounting standards or tax rates in the markets in which we operate, (g) the loss or financial instability of any significant customer(s), including as a result of product recalls or safety concerns related to our products, (h) changes in consumer behavior, trends and preferences, including health and whole grain trends, and the movement toward less expensive store branded products, (i) the level of success we achieve in developing and introducing new products and entering new markets, (j) our ability to implement new technology and customer requirements as required, (k) our ability to operate existing, and any new, manufacturing lines according to schedule, (l) our ability to implement and achieve our corporate responsibility goals in accordance with regulatory requirements and expectations of stakeholders, suppliers, and customers; (m) our ability to execute our business strategies which may involve, among other things, (1) the ability to realize the intended benefits of completed, planned or contemplated acquisitions, dispositions or joint ventures, (2) the deployment of new systems (e.g., our enterprise resource planning ("ERP") system), distribution channels and technology, and (3) an enhanced organizational structure (e.g., our sales and supply chain reorganization), (n) consolidation within the baking industry and related industries, (o) changes in pricing, customer and consumer reaction to pricing actions (including decreased volumes), and the pricing environment among competitors within the industry, (p) our ability to adjust pricing to offset, or partially offset, inflationary pressure on the cost of our products, including ingredient and packaging costs; (q) disruptions in our direct-store-delivery distribution model, including litigation or an adverse ruling by a court or regulatory or governmental body that could affect the independent contractor classifications of the independent distributor partners, and changes to our direct-store-delivery distribution model in
Information Regarding Non-GAAP Financial Measures
The company prepares its consolidated financial statements in accordance with
The company defines EBITDA as earnings before interest, taxes, depreciation and amortization. Earnings are net income. The company believes that EBITDA is a useful tool for managing the operations of its business and is an indicator of the company's ability to incur and service indebtedness and generate free cash flow. The company also believes that EBITDA measures are commonly reported and widely used by investors and other interested parties as measures of a company's operating performance and debt servicing ability because EBITDA measures assist in comparing performance on a consistent basis without regard to depreciation or amortization, which can vary significantly depending upon accounting methods and non-operating factors (such as historical cost). EBITDA is also a widely-accepted financial indicator of a company's ability to incur and service indebtedness.
EBITDA should not be considered an alternative to (a) income from operations or net income (loss) as a measure of operating performance; (b) cash flows provided by operating, investing and financing activities (as determined in accordance with GAAP) as a measure of the company's ability to meet its cash needs; or (c) any other indicator of performance or liquidity that has been determined in accordance with GAAP.
The company defines adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted diluted EPS, adjusted income tax expense and adjusted SD&A, respectively, to exclude additional costs that the company considers important to present to investors to increase the investors' insights about the company's core operations. These costs include, but are not limited to, the costs of closing a plant or costs associated with acquisition-related activities, restructuring activities, certain impairment charges, legal settlements, costs to implement an enterprise resource planning system and enhance bakery digital capabilities (business process improvement costs) to provide investors direct insight into these costs, and other costs impacting past and future comparability. The company believes that these measures, when considered together with its GAAP financial results, provides management and investors with a more complete understanding of its business operating results, including underlying trends, by excluding the effects of certain charges. Adjusted EBITDA is used as the primary performance measure in the company's 2014 Omnibus Equity and Incentive Compensation Plan (Amended and Restated Effective May 25, 2023).
Presentation of gross margin includes depreciation and amortization in the materials, supplies, labor and other production costs according to GAAP. Our method of presenting gross margin excludes the depreciation and amortization components, as discussed above.
The company defines net debt as total debt less cash and cash equivalents. Net debt to EBITDA is used as a measure of financial leverage employed by the company.
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SOURCE Flowers Foods, Inc.
FAQ
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