Irish food group IAWS has bought US specialty baked-goods business Otis Spunkmeyer Holdings in a deal worth up to $561 million (€445 million), the company announced today.
The acquisition is being funded by additional debt facilities and is expected to enhance IAWS's earnings from the date of completion, scheduled for the end of October, the company said.
"Based on a closing enterprise value of $561 million, the consideration for the equity is circa $340 million with an additional payment to stock and option holders contingent on the achievement of agreed performance milestones, up to a maximum of $25 million," the group said.
Otis Spunkmeyer is a major premium freshly baked goods brand in its US market categories. IAWS says it is an iconic brand with strong recognition nationally in food service and retail channels.
IAWS also owns the Cuisine de France baked products brand.
Otis operates manufacturing facilities in California, Texas, South Carolina and Pennsylvania and generated revenues of $336 million last year and operating profit of $29.1 million.
In addition to supplying prepared products for fresh baking, Otis also supports customers with ovens, merchandising, display cases and point-of-sale material. Otis has over 55,000 ovens in use throughout the United States in both food service and retail outlets.
IAWS chief executive Owen Killian said: "Otis's product categories are complementary with our existing US business in both retail and food service channels. The acquisition is an excellent fit and offers IAWS a strong platform for future growth in the US market."
Speaking on RTÉ's Morning Ireland, Mr Killian said making acquisitions that extend the reach of IAWS was important to the group.
The Otis acquisition would give IAWS "tremendous strength and depth" in the US market, he said.