MARSHALL, Minn. (AP) _ The Schwan Food Company said Thursday it will buy the frozen dessert business of Mrs. Smith's Bakeries from Flowers Foods for about $240 million in cash.
The deal includes the Mrs. Smith's, Pet-Ritz and related frozen dessert brands; Mrs. Smith's manufacturing facilities in Stillwell, Okla., and Spartanburg, S.C.; Mrs. Smith's facilities in Suwanee, Ga.; foil press equipment in Pottstown, Pa.; and Mrs. Smith's frozen dessert inventories.
Flowers will keep the frozen bread and roll businesses of Mrs. Smith's, and said it will complement its core fresh bread business.
Mrs. Smith's frozen desert business employs 1,087 people. It produces a broad line of frozen deserts, including pies, cakes, cobblers and pie crusts for retail grocery, foodservice and in-store bakery sales. The portion Schwan is buying has about $350 million in annual sales.
M. Lenny Pippin, president and chief executive of Schwan, called the acquisition ``a perfect and powerful fit'' with its existing frozen food business.
Amos R. McMullian, Flowers chairman and chief executive, said his company will use the money to pay down debt and give it more flexibility to make acquisitions, buy back stock and pay dividends.
The sale is expected to close in the first quarter, subject to regulatory approval, Pippin said.
Marshall-based Schwan, which is privately held, employs 24,000 people across the United States and in Europe, manufacturing and selling frozen foods through home delivery, retail grocery and foodservice channels.
Flowers Foods, headquartered in Thomasville, Ga., operates 33 bakeries making a wide range of products marketed in the Sun Belt and nationwide.