Sara Lee Frozen Bakery to buy Superior Cake Products

Oak Brook Terrace-based Sara Lee Frozen Bakery has agreed to buy Hostess Brands' Superior Cake Products, Inc. in-store bakery business for $65 million in cash, according to news release Friday.

The sale is expected to close during the third quarter.

"We are thrilled to add Superior to our portfolio of established and iconic brands," Sara Lee Frozen Bakery Chief Executive Officer Craig Bahner said in the release. "This acquisition accelerates Sara Lee Frozen Bakery's strategic goal of expanding our presence in the high-growth in-store bakery category. Along with our new colleagues at Superior, we will continue to innovate and deliver irresistible foods that meet retail customer and consumer demands for premium, 'worth it' indulgences."

Superior has been baking quality products for more than a century, producing a range of sweet goods including Éclairs, Madeleines, Brownie Bites®, Black and White Cookies and other offerings made under the "Superior on Main®" brand name.

In 2016, Hostess acquired Superior for approximately $51 million and grew the business from $33 million of net revenue for the 12 months before the acquisition in May 2016, to approximately $43 million of net revenue for the 12 months ended April 30, 2019.

Hostess Brands officials say they expect to use the net proceeds from the sale to pursue a range of potential strategic options, including reinvesting in its business.

"Superior has been a high performing business and we believe that it will continue to thrive in Sara Lee Frozen Bakery's portfolio as we focus our future investments on areas of our business that better leverage our core competencies and pillars for growth," Hostess President and Chief Executive Officer Andy Callahan said in the release. "I would like to thank the Superior team for their contributions to the Company and wish them continued success as they move forward under new ownership."