Flowers Foods Completes All Cash Merger With Tasty Baking Company

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May 25, 2011, 08:00 ET

THOMASVILLE, Ga. and PHILADELPHIA, May 25, 2011 /PRNewswire/ -- Flowers Foods, Inc. (NYSE: FLO) and Tasty Baking Company today announced the completion of Flowers' all cash merger with Tasty Baking Company for a total purchase price of approximately $175 million, including the payoff of Tasty's indebtedness and transaction expenses.

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With the completion of the merger, Tasty Baking's common stock ceased trading on Nasdaq Global Market (NasdaqGM: TSTY) at the close of market on May 24, 2011 and is no longer listed on the NasdaqGM. Tasty is now a wholly owned subsidiary of Flowers and is part of Flowers' direct-store-delivery segment.

Flowers completed the transaction through a short-form merger following Flowers' tender offer through its wholly owned subsidiary, Compass Merger Sub, Inc., for all of the outstanding shares of common stock of Tasty for $4.00 per share in cash, without interest and less any applicable withholding tax. Each share of common stock of Tasty not accepted for payment in the tender offer has been converted into the right to receive $4.00 per share in cash, without interest and less any applicable withholding taxes, which is the same price that was paid in the tender offer.

Tasty Baking reported 2010 net sales of $170 million. The merger of Flowers Foods with Tasty creates a larger business with a complementary portfolio of high-quality bakery products and deepens Flowers' penetration of the estimated $4 billion U.S. snack cake category.

"The Tasty merger is consistent with our growth strategy and we look forward to the opportunities ahead," said George E. Deese, chairman of the board and CEO of Flowers Foods. "We extend a warm welcome to Tasty's team members and independent sales distributors. Working together, we can bring the Tastykake brand to consumers in the South and Southwest and introduce our Nature's Own soft variety breads through Tasty's distribution area in the heart of the Northeast Corridor. With the addition of Tasty's distribution network, Flowers now has access to 61 percent of the U.S. population through direct-store-delivery.

"We recognize that consumers hold Tastykake in very high regard when it comes to product quality and freshness," Deese said. "Tastykakes will continue to be made by team members at the Navy Yard (Philadelphia) and Oxford, Pa., bakeries, using the same recipes and local ingredients that have created such strong consumer loyalty for the Tastykake brand."

Charlie Pizzi, who served as Tasty's president and CEO, said, "The merger with Flowers creates opportunities for Tasty employees, customers, suppliers, independent sales distributors, and other constituents. Flowers brings financial strengths to ensure that Tastykake will remain an iconic brand of fresh and delicious snack cakes, which Philadelphians are proud to claim as their own. Flowers is well respected in the baking industry and we look forward to assisting with a smooth integration of the two companies."

With the merger completed, Flowers and Tasty will work together to achieve a successful integration and to realize the benefits of the transaction. Flowers has experience integrating mergers and acquisitions, having completed more than 100 transactions since listing publicly in 1968.

About Flowers Foods

Founded in 1919 and headquartered in Thomasville, Ga., Flowers Foods, with 2010 sales of $2.6 billion, is one of the nation's leading producers and marketers of packaged bakery foods for retail and foodservice customers. Among the company's top brands are Nature's Own, Whitewheat, Tastykake, and Mrs. Freshley's. With the Tasty merger, Flowers now operates 41 bakeries that are among the most efficient in the baking industry. Flowers Foods produces, markets, and distributes fresh bakery products that are delivered to customers daily through a direct-store-delivery system serving the Southeast, Mid-Atlantic, and Southwest. The company also produces and distributes fresh snack cakes and frozen breads and rolls nationally through warehouse distribution. For more information, visit www.flowersfoods.com.

Forward Looking Statements

Statements contained in this press release that are not historical facts are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected. Other factors that may cause actual results to differ from the forward-looking statements contained in this release and that may affect the company's prospects in general include, but are not limited to, (a) competitive conditions in the baked foods industry, including promotional and price competition, (b) changes in consumer demand for our products, (c) the success of productivity improvements and new product introductions, (d) a significant reduction in business with any of our major customers including a reduction from adverse developments in any of our customer's business, (e) fluctuations in commodity pricing, (f) our ability to fully integrate recent acquisitions into our business, and (g) our ability to achieve cash flow from capital expenditures and acquisitions and the availability of new acquisitions that build shareholder value. In addition, our results may also be affected by general factors such as economic and business conditions (including the baked foods markets), interest and inflation rates and such other factors as are described in the company's filings with the Securities and Exchange Commission.

SOURCE Flowers Foods, Inc.