19 Dec Grupo Bimbo

Grupo Bimbo S.A.B. de C.V. (“Grupo Bimbo”) is the largest baking company in the world, with more than 150 plants, 51,000 routes and 127,000 employees in 19 countries throughout the Americas, Europe and Asia. In Mexico, its home country, Grupo Bimbo is the market leader in the fresh baked goods industry, offering a product portfolio that includes sliced bread, rolls, cakes, snack cakes, cookies, confectionary, salty snacks and tortillas. Grupo Bimbo is publicly traded on the Bolsa Mexicana de Valores. The group benefits from a strong credit profile (rated Baa2/BBB), which provides good access to global capital markets.

Beginning in the 1990s, in response to both NAFTA and growth in South America, Grupo Bimbo began expanding through a combination of strategic acquisitions and organic growth.

Atlas Advisors has worked closely with the Grupo Bimbo management team for more than a decade, helping to develop and execute a corporate finance strategy to match concrete opportunities with its corporate objectives of long-term profitable growth underpinned by low-cost manufacturing and distribution, economies of scale and billion-dollar brands.

Today, in South America, Grupo Bimbo’s well-recognized brands include Bimbo, Marinela, Pullman, Nutrella, Plus Vita, Fargo, Lactal, Laura, Fuchs, Lalo, El Maestro Cubano, Plucky, Ricard and Ricolino, among others. The company operates in 14 South and Central American countries including Argentina, Brazil, Chile, Colombia, Costa Rica, Salvador, Guatemala, Honduras, Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela. The product menu in the region replicates that of Mexico with the addition of alfajores.

It is in the U.S., however, where Grupo Bimbo has achieved scale and critical mass comparable to its business in Mexico, resulting in its current Number 1 position in the fresh baked goods industry in North America. Today in the U.S., Grupo Bimbo’s U.S. subsidiary, Bimbo Bakeries USA (“BBU”) is the only bakery company with a national presence represented with premium, mainstream and everyday brands.

In response to U.S. industry trends, Grupo Bimbo has become a leading consolidator, achieving a scale in both its manufacturing footprint and brand portfolio that enables it to compete effectively with private label as a brand of choice for millions of consumers. Grupo Bimbo/BBU today is a low-cost manufacturer and distributor of fresh baked products that carry iconic brands and offer healthy choices to consumers.

Critical steps in the Group’s evolution to market leadership in the U.S. include two acquisitions, both of which Atlas Advisors advised on:

• the U.S. fresh bakery business of Weston Foods, Inc. from George Weston Limited in 2008; and
• the North American Fresh Bakery business of Sara Lee Corporation in 2011.

George Weston Limited’s U.S. Fresh Bakery business includes iconic brands such as Arnold, Brownberry, Oroweat, Freihofer’s and Stroehmann, among others, for bread; Thomas’ English muffins; and Entenmann’s snack cakes. With 35 manufacturing facilities and more than 7,000 distribution routes, the combined business offers a portfolio of both highly differentiated national brands complemented by regional mainstream favorites that cover a range from fresh baked bread to fresh baked desserts.

The acquisition of the North American Fresh Bakery business of Sara Lee provided Grupo Bimbo with brand and geographic scale. The Sara Lee brand is particularly strong in the center of the country and the West, balancing Grupo Bimbo’s/BBU’s Northeastern and Southern footprint. The Sara Lee manufacturing network supplemented Bimbo’s existing capabilities, providing efficiencies and economies of scale in manufacturing and distribution.

As part of its evolution as global leader in the fresh baked-goods industry, Grupo Bimbo also made a small acquisition in Spain. The €115 million acquisition of Bimbo SA, Spain, from Sara Lee Corporation, after the business had had a succession of owners over the past decade, reunites the Bimbo brand globally and provides a platform for the further internationalization of its historic brand. Atlas also advised on this transaction, which closed in 2012.

As consolidation continues in the North America fresh baked-goods industry, Atlas continues to work with Grupo Bimbo, advising on opportunistic acquisitions and divestitures that will reinforce its state-of-the-art manufacturing profile, efficient distribution and branded market leadership position, and enables Grupo Bimbo to continue to offer consumers quality products across multiple platforms at a wide range of price points.