US-based packaged food company Hostess Brands has signed a definitive agreement to sell its in-store bakery business Superior Cake Products to Sara Lee Frozen Bakery for $65m, subject to post-closing adjustments.

For more than a century, Superior has been producing a range of sweet goods, including Éclairs, Madeleines, Brownie Bites, Black and White cookies and other products under the ‘Superior on Main’ brand name.

Sara Lee Frozen Bakery CEO Craig Bahner said: “We are thrilled to add Superior to our portfolio of established and iconic brands.

“This acquisition accelerates Sara Lee Frozen Bakery’s strategic goal of expanding our presence in the high-growth in-store bakery category.

“Along with our new colleagues at Superior, we will continue to innovate and deliver irresistible foods that meet retail customer and consumer demands for premium, ‘worth it’ indulgences.”

Hostess Brands intends to use sales proceeds to reinvest in its business, pursue potential strategic acquisitions and de-leverage its balance sheet, while effectively managing its capital structure.

Completion of the deal is subject to customary closing conditions and is expected to take place in the third quarter of this year.

Hostess Brands president and CEO Andy Callahan said: “Superior has been a high performing business and we believe that it will continue to thrive in Sara Lee Frozen Bakery’s portfolio as we focus our future investments in areas of our business that better leverage our core competencies and pillars for growth.

“I would like to thank the Superior team for their contributions to the company and wish them continued success as they move forward under new ownership.”

Hostess acquired Superior Cake Products for nearly $51m in 2016.

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