George Weston Limited has signed an agreement to sell its Weston Foods fresh and frozen bakery businesses to FGF Brands, a Canadian, family-owned bakery.
The purchase price of an aggregate cash consideration of $1.2 billion represents an approximate 10 x multiple on the estimated 2021 EBITDA of Weston Foods.
"The Weston Foods business has been the foundation for the Weston Group in Canada since its establishment in 1882 and the decision to sell it was a difficult one," says Galen G. Weston, the company's chairman and CEO. "However, we are pleased that the purchaser of the fresh and frozen businesses is FGF, another long-standing family business with a strong presence in bakery and a significant footprint in Canada. With FGF as the new owner, the business will be in good hands."
"We are thrilled to be acquiring the fresh and frozen businesses of Weston Foods, a Canadian company with over 100 years of baking experience," says FGF co-founder Tejus Ajmera. "And we look forward to building on that legacy by investing in people, facilities, and innovation across our entire operations, in collaboration with Weston Foods president Luc Mongeau and his team."
George Weston announced on March 23, 2021 plans to sell its bakery segment and to focus on its retail and real estate businesses. The company expects to return the net proceeds from the transaction to shareholders through share repurchases over time. In the interim, and said in a statement that it is committed to ensuring "a smooth transition plan is in place as Weston Foods continues to support its customers and workforce."