June 26, 2008
Fitch: Flowers’ Ratings Unaffected By Acquisition Announcement
Flowers Foods Inc. (Flowers; NYSE: FLO) ratings are unaffected by today's announcement that it has executed a definitive agreement to acquire privately owned ButterKrust Bakery (ButterKrust) for approximately $90 million. While the purchase is likely to be funded with debt, Fitch does not anticipate further material acquisitions in the near term.
ButterKrust manufactures and markets fresh breads and rolls under the Country Hearth, Rich Harvest, Sunbeam and various store brands throughout Florida. The company generates approximately $70 million of annualized sales. The acquisition includes the company's 250,000 square-foot bakery plant which provides Flowers additional production capacity needed to serve the fast growing Florida market place.
Fitch's ratings for Flowers are as follows:
--Issuer Default Rating (IDR) 'BBB';
--Senior unsecured credit facility 'BBB'.
The Rating Outlook is Stable.
At the quarter ended April 19, 2008, Flowers had approximately $28 million of debt.
See press release 'Fitch Affirms Flowers Foods' IDR at 'BBB'; Outlook Stable', dated June 24, 2008.
Flowers Foods, Inc. is one of the nation's leading producers and marketers of packaged bakery foods for retail and foodservice customers. Flowers produces breads, buns, rolls, snack cakes and pastries that are distributed fresh in the Southeast, Southwest and Mid-Atlantic regions and frozen to customers nationwide. Approximately 20% of its sales are to Wal-Mart/Sam's Club. Flowers' Nature's Own flagship brand is the country's best-selling brand of soft variety breads and buns. The company operates two divisions: Direct-Store-Delivery (DSD) formerly referred to as Flowers Foods Bakeries Group, and Warehouse Delivery, formerly referred to as Flowers Foods Specialty Group. DSD represented approximately 81% of revenues and 85% of operating income in fiscal 2007 while warehouse delivery represented 19% and 15%.