Bimbo Consumes Sara Lee US

Grupo Bimbo will acquire the US bakery assets of Sara Lee for $959m. The deal price is less than the $1.1bn-$1.5bn bankers and analysts had forecast for the unit. However, it does not include Sara Lee’s Spanish or Australian assets, which several analysts had thought would be particularly attractive to Bimbo. Sara Lee owns the Bimbo brand in Spain, for example, which the original Bimbo founding family had sold years earlier and was eventually acquired by Sara Lee. The deal value implies an 8.9x Ebitda multiple on LTM adjusted Ebitda of $108m, above the 7x-8x Ebitda multiple that had been expected, according to analyst reports. Bimbo says it has identified $150m-$200m in potential synergies through operational overlap, which would bring the synergized multiple down to 3.7x EBITDA. Sara Lee refers questions to Bimbo, which does not return calls for comment. BAML is advising Sara Lee, with Bimbo retaining Atlas Advisors. The bank market is getting ready for an associated financing, which would have to launch soon to get done this year. The late 2008 acquisition of Weston Foods’ Eastern US distribution assets by Bimbo included a dual tranche, dual currency $1.7 billion syndicated loan via Bank of America, BBVA, Citi, ING, HSBC and Santander.