Sara Lee Sells Business to Ralcorp for $545M

Sara Lee Corp. signed an agreement to sell its North American Refrigerated Dough business to Ralcorp Frozen Bakery Products, Inc., a division of Ralcorp Holdings, Inc., for $545 million. The transaction is anticipated to close by the end of calendar year 2011.
 

In May 2011, Sara Lee Corp. announced that it was evaluating strategic options for this business, which provides a full range of private brand products including basic and specialty biscuits, crescent rolls, pizza and pie crusts and toaster pastries. These products are packaged for and sold to leading food and mass retailers. The business recorded net sales in excess of $300 million for its fiscal year ended July 2010.
 

“The sale of our North American Refrigerated Dough business to Ralcorp is another step forward for Sara Lee as we continue to prepare for our separation into two publicly-traded companies,” says Marcel Smits, chief executive officer, Sara Lee Corp. “It will better enable our North American business to focus on its branded meats and frozen desserts products and establish a platform for a strong and independent future.”

 

"We are excited about the addition of the refrigerated dough business to the Ralcorp family of products," said Kevin J. Hunt, co-CEO and president of Ralcorp. "This transaction will allow Ralcorp to be a private-brand leader in the $1.8 billion refrigerated dough category. Together with the refrigerated dough business, we will continue to provide our customers with the high-quality service and products they have come to expect from Ralcorp."
 

The refrigerated dough business employs approximately 700 people and has manufacturing and distribution facilities in Carrollton, Texas and Forest Park, Georgia. Upon completion of the transaction, the business will operate as part of a broader Ralcorp Frozen Bakery Products division.
 

Ralcorp intends to fund the transaction through short-term debt that will be repaid with the proceeds from the Post Foods separation. The acquisition is subject to customary closing conditions and regulatory approvals.  The Company expects the acquisition to be completed in 60 to 90 days.