Aryzta AG agreed to buy Klemme AG for 280 million euros ($376 million) as the Swiss owner of bakery brands including Delice de France and Otis Spunkmeyer expands in Germany.
The deal includes a 10 million-euro deferred payment and will be funded with existing resources, Zurich-based Aryzta said today in a statement. Klemme, which makes bread rolls, pastries and doughnuts in seven bakeries, had revenue of 229 million euros in 2012.
“The acquisition today does make some sense and it seems like a reasonable price,” said Liam Igoe, an analyst at Goodbody Stockbrokers in Dublin, who has a buy recommendation on the stock. “It gives them access to German supermarkets such as Lidl and Aldi. So far they have very few supermarket chain customers in continental Europe outside Switzerland.”
This is Aryzta’s biggest acquisition since it spent about $1.4 billion purchasing California-based Fresh Start Bakeries Holdings Inc. and a stake in the Canadian company Maidstone Bakeries Co. in 2010.
Aryzta fell 0.6 percent to 53.65 Swiss francs as of 10:09 a.m. in Zurich trading, trimming the stock’s 12-month gain to 20 percent. That gave the company a market value of 4.9 billion francs ($5.4 billion).
The company didn’t give a date for completion of the purchase as it’s subject to approval from Germany’s antitrust regulator. Aryzta said the acquisition should boost earnings by 15 euro cents on a full-year basis, and it will have a “modest” effect on the current financial year, which runs through July.
“Klemme is a very well-invested bakery asset,” Aryzta Chief Executive Officer Owen Killian said in the statement. “This acquisition will transform Aryzta’s capability in Europe.”
Following the purchase, Aryzta said it plans to extend the cost and duration of a 400 million-euro initiative earmarked for integrating businesses and information technology systems that began in 2011.