THOMASVILLE, GA. — Flowers Foods, Inc. has entered into a definitive agreement to acquire Lepage Bakeries, Inc., of Auburn, Maine, for $370 million in cash and stock. Lepage Bakeries operates three bakeries — two in Lewiston, Maine, and one in Brattleboro, Vt. — and has strong regional brands in Country Kitchen and Barowsky’s as well as a solid distribution system serving retail and food service customers throughout the Northeast.

Founded in 1903, Lepage is expected to expand Flowers’ presence in New England and New York by providing a broader variety of bread, buns and rolls to Flowers. Additionally, Lepage’s direct-store delivery platform is expected to accelerate penetration of Flowers’ Nature’s Own and Tastykake brands in the Northeast.

Lepage generates approximately $166 million in net sales.

“The Lepage name is one of the oldest and most respected in the baking industry and we are fortunate to combine this fine organization with Flowers Foods,” said George E. Deese, chairman and chief executive officer. “Lepage has operating strategies similar to Flowers’ and the Lepage team is known for its innovation and quality. We believe the addition of Lepage supports our strategy as it will bring efficient bakeries with available production capacity, access to markets in the Northeast, new products and brands, and more than 550 experienced team members to our company. Once completed, the acquisition will increase our D.S.D. access from 64% to 70% of the U.S. population, moving us closer to our goal of at least 75% by 2016. We look forward to the anticipated growth opportunities this acquisition is expected to provide as we continue to expand the geographic footprint of our Nature's Own and Tastykake brands.”

Commenting on behalf of Lepage Bakeries, Andy Barowsky, president and c.e.o., and Albert Lepage, chairman of the board, said, “Our team is pleased to become part of Flowers Foods. Our companies have a shared commitment to the highest quality products, excellent customer service, ongoing innovation, and capital investments to keep our bakeries the best in the industry as well as a similar culture. We look forward to continuing to innovate with new products and improved processes when we join the Flowers team.”

Lepage Bakeries will operate under its current name as a part of Flowers Foods’ D.S.D. segment, and Mr. Barowsky and Mr. Lepage will serve as co-chairmen of the board of Lepage Bakeries. In addition, Mr. Barowsky will become vice-chairman of innovation for Flowers Foods.

“Lepage Bakeries has achieved strong sales and earnings growth under the leadership of the Barowsky/Lepage team, and we expect that growth trend to continue once the transaction is accomplished,” Mr. Deese said.

Flowers said the transaction will include the purchase by one of its wholly-owned subsidiaries of all the issued and outstanding shares of Lepage Bakeries, Inc. and certain of its affiliates in exchange for $300 million in cash at closing and $20 million in total deferred cash payments beginning on the fourth anniversary of the closing date. Additionally, the transaction will include the merger of certain other affiliates of Lepage with and into a second wholly-owned subsidiary of Flowers in exchange for a number of shares of Flowers’ common stock valued at $50 million.

Flowers expects to complete the transaction in its fiscal second quarter and said it will add 3c to 5c to its earnings per share in fiscal 2012, excluding acquisition costs, and 8c to 12c to e.p.s. in fiscal 2013.