TORONTO — George Weston Ltd. has begun the process to sell Weston Foods and announced plans to focus on its retail and real estate businesses. This announcement follows a strategic review by the Board of Directors that determined these two pillars will remain the company’s most significant drivers of long-term value creation. Despite its position as a leading North American bakery, Weston Foods remains a small part of the parent company’s overall value.
The sale represents the best opportunity for George Weston Ltd. to unlock its growth potential, according to the company.
“Weston Foods has been at the core of our company for 139 years,” said Galen G. Weston, chairman and CEO. “It has a strong foundation, attractive and growing margins, a robust list of customers, strong brands and a first-rate management team. As George Weston focuses its attention on Loblaw and Choice Properties, we are confident this is the right time to unlock the strategic growth potential that exists within Weston Foods through its sale.”
A leading North American manufacturer, Weston Foods serves retail and foodservice customers with packaged fresh bread and rolls as well as frozen and artisan bread and rolls, cakes, donuts, pies, cookies, crackers, wafers and alternatives throughout Canada and the US. The company produces private label products and well-known brands including Wonder, ACE Bakery, Country Harvest, D’Italiano, Casa Mendosa, Dave’s Killer Bread and Gadoua.
“As George Weston focuses its attention on Loblaw and Choice Properties, we are confident this is the right time to unlock the strategic growth potential that exists within Weston Foods through its sale."
George Weston Ltd. intends to commence an orderly sale process shortly, ensuring a smooth transition plan for its customers and workforce. In the meantime, the business will focus on growing sales and improving margins.
The retail and real estate businesses have solid balance sheets and generate strong cash flows, the company noted in a recent press release. Proceeds from the sale are planned to be returned to shareholders through share repurchases over time.
The company has retained Houlihan Lokey and CIBC Capital Markets to advise on the sale process, and will update the market on progress as appropriate.
Weston Foods had sales of $2.1 billion and Adjusted EBITDA1 of $200 million in 2020.
Additionally, George Weston Ltd. and Loblaw also announced Sarah Davis, Loblaw president, will retire as of May 6 and will be succeeded by Galen Weston, current executive chairman and George Weston Ltd. chairman and CEO. Weston will maintain his role with George Weston Ltd. while assuming the role of Loblaw president.
