ITASCA, ILL. — Pennant Foods, a provider of specialty bakery products and solutions to the food service and retail industry, has entered an agreement to acquire a portion of the frozen bread dough business of Minneapolis-based General Mills, Inc.’s Bakeries and Foodservice unit.
As part of the transaction, Pennant Foods would acquire four manufacturing facilities located in Bakersfield, Calif.; Hazleton, Pa.; Vinita, Okla.; and Montreal.
"The addition of these capabilities will greatly enhance Pennant’s ability to serve the growing needs of our key customers, as well as open new markets to the company," said Jim Clough, president of Pennant Foods. "We are a customer centric organization that has enjoyed a strong market position over the years and this strategic acquisition is indicative of our overall optimism and commitment to growth in our focus categories."
Craig Olson, president and chief executive officer of Fresh Start Bakeries, parent of Pennant Foods, added, "Our objective is to build on and broaden the products and services we provide to our customers in the global bakery products market. Pennant has been a strong and reliable performer for Fresh Start and I am confident that the synergies of this acquisition will both solidify and grow the value we provide to our customers."
According to the 2009 Baking/Snack Directory & Buyers Guide published by Sosland Publishing Co., Fresh Start Bakeries operates eight plants and had 2008 grain-based foods sales of $88,846,000, while Pennant Foods operates six plants, including three frozen dough facilities in North Haven, Conn.; Northlake, Ill.; and Chaska, Minn. Pennant had 2008 grain-based foods sales of $261 million, according to the 2009 Baking/Snack Directory & Buyers Guide.
Financial terms of the transaction were not disclosed, but in a March 11 filing with the Securities and Exchange Commission, General Mills said it expects to record a loss of approximately $19 million after taxes in the fourth quarter in connection with the sale, primarily from a write-off of associated goodwill.
The Pillsbury frozen dinner roll product lines were not a large portion of General Mills’ business, and in exiting the business the company said it would record an after-tax charge of $13 million in the fourth quarter, including a non-cash impairment charge against assets and employee severance.
General Mills bought Pillsbury and acquired the four plants when it purchased the brand from Diageo P.L.C. in 2001.