Item 1.01 Entry into a Material Definitive Agreement.
On January 7, 2025, Flowers Foods, Inc., a Georgia corporation (the “Company”), Daffodil Acquisition Sub, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Purchaser”), and Daffodil Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Purchaser (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), with Purposeful Foods Holdings, Inc., a Delaware corporation (“Purposeful Foods”), the parent company of Simple Mills, Inc.
Pursuant to the Merger Agreement, the Company will acquire Purposeful Foods for a purchase price of $795 million in cash and Merger Sub will merge with and into Purposeful Foods, with Purposeful Foods being the surviving corporation (“Surviving Corporation”). After the consummation of the merger, Purchaser will be the sole stockholder of the Surviving Corporation.
The Merger Agreement contains customary representations and warranties made by each of the parties. The parties have also agreed to various covenants in the Merger Agreement, including agreements by Purposeful Foods to conduct its operations in the ordinary course of business consistent with past practice.
The closing of the merger is subject to customary closing conditions, including (i) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) the continued accuracy of the representations and warranties of the parties (subject to specified materiality standards) and (iii) the absence of a material adverse effect with respect to Purposeful Foods.
In connection with entering into the Merger Agreement, the Company entered into a commitment letter, pursuant to which, among other things, Royal Bank of Canada has committed to provide debt financing for consummation of the merger, consisting of a $795.0 million 364-day senior unsecured term loan credit facility (the “Term Loan Facility”), on the terms and subject to the conditions set forth in the commitment letter. The Term Loan Facility will be subject to reduction or prepayment upon the completion of certain debt and equity financings, as applicable, and upon other specified events. The obligations of the commitment party to provide this debt financing is subject to a number of customary conditions, including, without limitation, execution and delivery of definitive documentation. Pursuant to the Merger Agreement, Purposeful Foods has agreed to cooperate with the Company’s efforts in connection with these financings.
The closing of the merger is expected to be consummated during the first quarter of 2025, subject to receipt of regulatory and other approvals and customary closing conditions.
The foregoing description of the Merger Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Merger Agreement, a copy of which will be filed with the Company’s next Annual Report on Form 10-K.
Item 7.01 Regulation FD Disclosure
On January 8, 2025, the Company issued a press release announcing the proposed acquisition, a copy of which is furnished herewith as Exhibit 99.1 and incorporated herein by reference. Also on January 8, 2025, the Company posted on its website at https://www.flowersfoods.com an investor presentation regarding the proposed acquisition, a copy of which is furnished herewith as Exhibit 99.2 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
