For years, Georgians have heard Northerners describe the delights of Tastykakes. Soon, they may get the chance to try them without leaving the state.
Flowers Foods of Thomasville announced Monday that it is buying Tasty Baking Co., the Philadelphia maker of Tastykakes, a 100-product brand highlighted by the iced or jelly-filled sponge cake called a Krimpet.
The move will open new markets across the South for the iconic but financially-troubled snack brand, while expanding the customer base for Flowers' existing products. Flowers would'nt say when Tastykakes might appear in Georgia because the sale has not closed.
Flowers is by far the larger of the two firms, with $2.6 billion in annual sales, 39 bakeries, including 6 in Georgia, and 8,800 employees, including 1,880 in Georgia. It has made more than 100 acquisitions since going public in 1968, including 11 in the last decade.
Tasty has just two bakeries and 740 employees and has been losing money. CEO Charles Pizzi in January said the company was exploring "alternatives" including "a possible sale or merger." Flowers had been a rumored partner.
While Tastykakes are as much a part of Philadelphia as the Liberty Bell, the Flowers name is not as well known as its many brands including Nature's Own, Cobblestone Mill, Sunbeam and Holsum.
Flowers said it will pay $165 million for Tasty, including the company's debt.
Explaining the deal, Flowers Foods' CEO George Deese cited "the iconic Tastykake brand, a solid sales base, and an effective distribution system." He said it "will expand Flowers' geographic reach and bring new customers and new opportunities for future growth."
Flowers has targeted more than a dozen states north of its existing market reach for growth in the next five years. They include those that comprise Tasty's core market.
Tasty will add $115 million to $125 million to Flowers sales in 2011, Flowers said, and $210 million to 225 million in 2012.
Flowers describes itself as a market leader in the white bread, buns and rolls and soft variety bread categories. It sees growth opportunities in cake and other categories. Its fresh bakery products are available to more than one-half the U.S. population, in 29 states and the District of Columbia, mainly in the Southeast, Southwest and mid-Atlantic.
Flowers was founded in 1919 in Thomasville. Tasty was founded in 1914 in Philadelphia.
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