Acquisitions in wholesale baking are hardly a rarity, but last week’s announcement that Flowers Foods, Inc. would acquire Lepage Bakeries, Inc. stands out as a development particularly rich in symbolism.
The move by Flowers to acquire the Maine-based baking company underscores the degree to which the Northeast has become a battleground for the industry. The Lepage transaction follows important others in recent years, which include the Flowers acquisition of Tasty Baking Co. and, a few years earlier, the Sara Lee (now Bimbo Bakeries USA) purchase of Butter-Krust Baking Co.
The Lepage transaction also is notable as emblematic of the longer-term trend of independent family-owned companies to be acquired by regional/national bakers. Here the symbolism is powerful because Albert R. Lepage, the company’s chairman who turned 65 last year, has been a prominent industry leader as an officer of the American Bakers Association for longer than 10 years.
Finally, the selling price of $370 million for a business generating $166 million in annual sales represented an about turn from the distressed prices at which Tasty Baking and the Sara Lee fresh baking businesses sold within relatively recent times. The Lepage transaction demonstrates the great value still possible for well run, strategically situated baking businesses.