Food group IAWS has announced its biggest acquisition to date, buying US bakery group Otis Spunkmeyer in a deal worth up to $561m (€445m).
IAWS is paying $340m to private equity firm Code Hennessy & Simmons and the US firm's management team, with an additional $25m payable depending on certain performance targets being reached. It also taking on some debt.
IAWS describes Otis Spunkmeyer as an 'iconic brand' in the US market, with 62,000 foodservice and retail customers across the country. It operates four manufacturing facilities in California, Texas, South Carolina and Pennsylvania.
Otis generated sales of $336m in 2005, with operating profits of $29m. IAWS says Otis's segment of the bakery market is complementary to its existing La Brea bakery business.
IAWS chief executive Owen Killian said the deal offered the company a strong platform for future growth in the US market. He told RTE radio IAWS would be taking on debt of €450m to fund the buy.
Shares in the company closed €1.05 higher at €16.10 in Dublin this evening - a gain of over 6%.
