Aryzta offloads Brazilian bakery operations to Grupo Bimbo; secures €500m revolving credit

By Gill Hyslop contact

- Last updated on GMT

Aryzta has embarked on an aggressive strategy to get back to financial health. Pic: Aryzta
Aryzta has embarked on an aggressive strategy to get back to financial health. Pic: Aryzta

Related tags: Aryzta, Grupo bimbo, revolving credit facility, Aspire Bakeries, Lindsay Goldberg, Bell Food Group, Picard, Brynwood Partners

The Swiss-Irish group continues to simplify its business model with the sale of its Brazilian operations to Grupo Bimbo SAB de CV. Its aim to rebuild as a bakery leader in Europe and Asia has also been given a boost with a new €500m revolving credit facility.

In a statement, Aryzta said it had signed a binding agreement with the Mexican bakery giant, but did not provide financial details of the deal. The transaction is expected to be completed by the end of the Zurich-listed company’s fiscal 2022 second quarter, and is subject to customary closing conditions.

Road back to health

Earlier this year, Aryzta’s Irish shares were delisted from the Euronext stock exchange in Dublin. The exit from the Irish stock market follows the company's upheavals last year.

However, since September, the beleaguered company has been on a major disposal programme​ to get back to financial stability, which, according to chairman and interim CEO Urs Jordi, has exceeded expectations in all regards.

In March, Aryzta sold its North American business​ to an affiliate of US private equity firm Lindsay Goldberg. The net proceeds from the sale are expected to be around €650m, subject to finalisation of the purchase price. The offloaded unit now trades as Aspire Bakeries.

This was quickly followed by the sale of its sandwich business in Switzerland to Bell Food Group subsidiary, Hilcona. It also offloaded its remaining stake in French frozen food retailer Picard, along with its take-and-bake pizza business in North America to PE firm Brynwood Partners.

“Our focus will now centre on delivery of sustainable organic growth and achieving industry profitability and efficiency levels through our multilocal business strategy,”​ said Jordi.

“The successful sale of the Brazil businesses is a further positive step in the delivery of our strategy to rebuild Arytza’s leadership in bakery in Europe and Asia.”

Financial journey

Aryzta is due to issue its annual report and full-year results on 4 October.

For the nine months ended 1 May 2020, the company posted a 10% decline to €1.91bn ($2.22bn). Organic revenues fell around the world, by 14% in Europe to €934.6m ($1.09bn) and by 1.4% in the rest of the world segment to €179.3m ($209m).

Meanwhile, the Swiss-headquartered company has also entered into an agreement for a new €500m ($583m) revolving credit facility with Credit Suisse, Rabobank and UBS. Aryzta said the facility – which is expected to be used by early October – replaces the group’s current €800m ($934m) facility, which matures in September 2022.

Aryzta was advised on the Brazil transaction by Houlihan Lokey and Alantra, PinheiroNeto and KPMG.

Related topics: Bakery, Manufacturers, All LATAM