Flowers Foods, Inc. has announced a definitive agreement to acquire Dave’s Killer Bread for $275 million in cash from its existing shareholders, including members of the Dahl family and Goode Partners. Though the acquisition is still subject to regulatory approval and customary closing conditions, it is expected to be completed in Q3 2015.
“We are very excited about the pending acquisition of Dave’s Killer Bread,” said Allen L. Shiver, Flowers’ President and CEO. “This is a well-positioned, fast-growing company with excellent brand equity and an on-trend organic portfolio that appeals to today’s consumers.”
Shiver continued, “The Dahl family and Good Partners have built a great brand with a commitment to quality and community, two attributes that Flowers values tremendously. We are especially pleased to welcome the Dave’s Killer Bread team members who will bring expertise and experience to our company.”
In a press release, Flowers states that Dave’s has anticipated fiscal 2016 sales of $160 million to $170 million representing a revenue compound average growth rate of 32% over the past three years, driven by a dedicated and loyal customer base and geographic and channel growth.
According to IRI data, the organic bread market has grown at a rate of 27% over the last four years, a much higher rate than the $23 billion retail baked goods market. The data also shows Dave’s increased retail sales by 25% over the last year and by 168% over the three years prior to that.
Flowers will fund this acquisition using its existing revolving credit facility and available cash. This transaction is anticipated to be neutral to overall fiscal 2015 earnings.