St. Louis-based Ralcorp Holdings strengthened its frozen dough capabilities by entering into a definitive agreement to acquire Lodi, Calif.-based Cottage Bakery Inc. Ralcorp will pay $170.8 million for the family-owned bakery, which produces frozen par-baked breads and dough for the retail and foodservice segments.
Ralcorp has built up its frozen dough business in the last five years through a series of acquisitions, including Lofthouse Cookies (January 2002), Bakery Chef (December 2003) and Concept 2 Bakers (February 2004). Cottage Bakery will become part of Ralcorp’s Frozen Bakery Product segment, and retain its headquarters in Lodi, Calif.
The acquisition includes Cottage Bakery’s 350,000-sq.-ft. facility, which manufactures a variety of bakery foods, including artisan breads, cakes, cookies and frozen sweetgoods. Cottage Bakery is currently owned by Terry Knutson, who has grown the company from a small family bakery into a company that reported gross sales of $125 million for the year ended June 30.
“This acquisition enhances Cottage Bakery’s plans to continue growing and improving the business,” Knutson said. “We will continue to focus on our solid foundation: delivering superior levels of customer service, developing high quality new products and improving and expanding our manufacturing operations.”
Based on Cottage bakery’s 2006 results and Ralcorp’s initial assessment of Cottage bakery’s intangible asset valuation and related amortization, Ralcorp anticipates the transaction will add $.09 to $.12 to diluted earnings per share on a full fiscal year basis.
In other company news, Ralcorp Holdings announced that Ronald Wilkinson, corporate vice president and director of product supply of Ralston Foods Sales Inc. and the Carriage house Companies Inc., will become president of Bremner Inc. and Nutcracker Brands Inc. The position change will be effective Dec. 1.