The group said that the acquisition of the privately owned Best Brands fits with a strategy it launched in 2005 to target growth in the in-store bakery market.
Best Brands is one of the largest premium bakery manufacturers in the US with six major production facilities. Seventy-five per cent of its $538m sales in 2009 were in the in-store category, and it has a particular focus on frozen baked cakes and muffins but its portfolio also includes laminated dough, fillings and mixes.
CSM, which has operations in Europe, the US and Asia, said the new company would provide it with complementary products and expand its baking capabilities, with synergies in production, logistics and procurement expected to total at least $20m within three years.
The group said the acquisition price represented a multiple of 8.5 times reported 2009 earnings before interest, tax, depreciation and amortisation (EBITDA), and that it closed 2009 with substantially lower net debt compared to year-end 2008.
The food group said that its Bakery Supplies Europe division, which has been completely restructured over the last years, will also continue to improve its market position in strategic areas.
Moreover, it said that Purac division will continue its growth in preservation and green chemicals.
In December last year, CSM said that it was starting construction on a lactides production plant in Thailand to manufacture feedstocks for bioplastics production, with the unit ready to start up in the second half of 2011.
Purac is working with Sulzer Chemtech of Switzerland and Akzo Nobel of Germany in development of its PLA polymer production technologies.
Last summer, Gerard Hoetmer, CEO, noted that the innovation and customer relations foundations laid in recent years have stood the firm in good stead.
“Product offerings that include products which respond to health trends in bakery, our growing position in preservation, and of course the increasing interest in bio-plastics clearly strengthen our position in our markets,” he said.
“Despite declining volumes as a result of the economic downturn, we have successfully reinforced our bakery and Purac market positions.”