George Weston Limited announces sale of Weston Foods
The company plans to focus on retail and real estate.
George Weston Limited ("the Company") today announced its intention to focus on its retail and real estate businesses, as it launches a process to sell Weston Foods. This announcement follows a strategic review by the Board of Directors that determined these two pillars will remain the Company's most significant drivers of long-term value creation. Despite its position as a leading North American bakery, Weston Foods remains a small part of GWL's overall value. In the absence of attractive opportunities to increase its relative scale within the Company, the Board believes that a sale represents the best opportunity to unlock its growth potential.
"Weston Foods has been at the core of our company for 139 years. It has a strong foundation, attractive and growing margins, a robust list of customers, strong brands, and a first-rate management team," said Galen G. Weston, chairman and chief executive officer. "As George Weston focuses its attention on Loblaw and Choice Properties, we are confident this is the right time to unlock the strategic growth potential that exists within Weston Foods through its sale."
Weston Foods, a North American manufacturer, serves retail and foodservice customers with packaged fresh bread and rolls as well as frozen and artisan bread and rolls, cakes, donuts, pies, cookies, crackers, wafers and alternatives throughout Canada and the U.S. The company produces private label products and many well-known brands including Wonder, ACE Bakery, Country Harvest, D'Italiano, Casa Mendosa, Dave's Killer Bread and Gadoua.
The Company intends to commence an orderly sale process shortly, ensuring that a smooth transition plan is in place as Weston Foods continues to support its customers and workforce. In the meantime, the business will continue its focus on growing sales while improving margins. The Company's Retail and Real Estate businesses have solid balance sheets and generate strong cash flows. As a result, the proceeds from the sale of Weston Foods are likely to be returned to shareholders through share repurchases over time.
Houlihan Lokey and CIBC Capital Markets have been retained by the Company to advise on the sale process and the Company will update the market on progress as appropriate.
Weston Foods had sales of $2.1 billion and Adjusted EBITDA of $200 million in 2020.
Related to this announcement, a separate, joint press release with Loblaw Companies Limited is being released today.
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