TORONTO — George Weston Limited announced today that it has signed an agreement to sell its Weston Foods fresh and frozen bakery business to FGF Brands for an aggregate cash consideration of $1.2 billion.
The price represents a 10x multiple on the 2021 estimated EBITDA of the frozen and fresh bakery business, which comprised nearly 75% of Weston Foods’ 2020 net sales. The business is known for producing many private label products and household brands such as Wonder, Country Harvest and Dave’s Killer Bread.
“The Weston Foods business has been the foundation for the Weston Group in Canada since its establishment in 1882, and the decision to sell it was a difficult one,” said Galen G. Weston, the company’s chairman and CEO. “However, we are pleased that the purchaser of the fresh and frozen businesses is FGF, another long-standing family business with a strong presence in bakery and a significant footprint in Canada. With FGF as the new owner, the business will be in good hands.”
Founded in 2004, FGF calls itself a “technology company that bakes,” combining robotics, AI systems and supply chain solutions with quality food production. It operates in seven bakery categories and owns multiple brands including Stonefire Authentic Flatbreads and Simple Joys Bakery.
“We are thrilled to be acquiring the fresh and frozen businesses of Weston Foods, a Canadian company with over 100 years of baking experience,” said Tejus Ajmera, co-founder of FGF. “And we look forward to building on that legacy by investing in people, facilities and innovation across our entire operations, in collaboration with Weston Foods president Luc Mongeau and his team.”
Although this acquisition allows FGF to leverage Weston Foods’ century-old expertise in the baking industry, Ojus Ajmera, co-founder of FGF, says the company remains a startup at heart.
“This acquisition allows us to bring that same drive for disruption to more teams, brands and customers than ever before, as we pursue our vision to become the world’s greatest baker,” Ojus said.
George Weston announced its decision to sell the bakery segment in March, intending to focus on its retail and real estate businesses. The company expects to return the net proceeds of the transaction to shareholders through share repurchases overtime and is committed to ensuring that a smooth transition plan is in place.
The company expects to close the transaction before the end of the first quarter in 2022.
