Mondelez Bulks Up With $1.2 Billion Give & Go Bakery Deal

(Bloomberg) -- Mondelez International Inc. is stocking up on treats with a deal for the Canadian owner of the “two-bite” brownies brand, in a move that pushes further into the bakery industry.

The Oreo cookies owner bought a majority interest in Toronto-based Give & Go Prepared Foods Corp. from private equity firm Thomas H. Lee Partners, it said in a statement Tuesday. Mondelez paid about $1.2 billion for Give & Go., people with knowledge of the matter said.

Representatives for Mondelez and Thomas H. Lee declined to comment on the terms. The deal is expected to close in the second quarter, according to the statement.

“We are passionate about the consumer and this acquisition is very much on trend,” Glen Walter, president of North America for Mondelez, said in an interview. “We are very passionate about the on-the-go snack.”

Give & Go’s management will hold a minority stake in the Ontario-based company. Its headquarters will remain in Canada and all of its products will continue to be made at their current locations.

Indulgent Food Group

The Give & Go deal reflects a dual strategy for Mondelez, which like other snack makers is building on the popularity of the indulgent food category while also responding to consumer demand for healthier treats, including vegan options.

In July, Mondelez acquired a majority interest in Perfect Snacks, a maker of nut-butter based protein bars. Mondelez’s Cadbury business is developing a plant-based version of its flagship Dairy Milk chocolate brand, The Telegraph reported in February.

Mondelez should be able to build on solid distribution that Give & Go brands have in North America to accelerate sales, said Jennifer Bartashus, a Bloomberg Intelligence analyst.

“This acquisition is a good fit for Mondelez, because it brings a couple of well-known brands into the overall portfolio in categories that complement the company’s core strength in cookies, crackers and chocolate,” Bartashus said.

Most of Give & Go sales fall into categories with stronger growth and margin profiles than some parts of Mondelez’s portfolio such as gum and powdered beverages, she said.

Entry Point

Give & Go’s scale and high single-digit growth will give Mondelez an entry into the bakery and pastries, Wells Fargo & Co. analysts wrote in a note Tuesday.

“Over time we think capabilities exist to extend Mondelez’s existing brands into new formats,” they said.

Thomas H. Lee Partners bought Give & Go in 2016 from Omers Private Equity. The bakery acquired Create-A-Treat Ltd., Nafta Foods & Packaging Inc. and Uncle Wally’s Bake Shoppe during the firm’s ownership.

Mondelez shares have climbed 21% in the past year. They fell 1.1% to $57.11 at 3:23 p.m. in New York trading Tuesday. The S&P 500 Packaged Foods Index, in which Mondelez has about 30% weighting, was down 1.8%

To contact the reporters on this story: Crystal Tse in New York at ctse44@bloomberg.net;Deena Shanker in New York at dshanker@bloomberg.net

To contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, ;Sally Bakewell at sbakewell1@bloomberg.net, Michael Hytha

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