TORONTO – George Weston Limited (“George Weston”, “GWL”, or the “Company”) (TSX: WN) today announced its intention to focus on its Retail and Real Estate businesses as it launches a process to sell Weston Foods. This announcement follows a strategic review by the Board of Directors that determined these two pillars will remain the Company’s most significant drivers of long-term value creation. Despite its position as a leading North American bakery, Weston Foods remains a small part of GWL’s overall value. In the absence of attractive opportunities to increase its relative scale within the Company, the Board believes that a sale represents the best opportunity to unlock its growth potential.
“Weston Foods has been at the core of our company for 139 years. It has a strong foundation, attractive and growing margins, a robust list of customers, strong brands, and a first-rate management team,” said Galen G. Weston, Chairman and Chief Executive Officer. “As George Weston focuses its attention on Loblaw and Choice Properties, we are confident this is the right time to unlock the strategic growth potential that exists within Weston Foods through its sale.”
Weston Foods, a leading North American manufacturer, serves retail and foodservice customers with packaged fresh bread and rolls as well as frozen and artisan bread and rolls, cakes, donuts, pies, cookies, crackers, wafers and alternatives throughout Canada and the U.S. The company produces private label products and many well-known brands including Wonder®, ACE Bakery®, Country Harvest®, D’Italiano®, Casa Mendosa™, Dave’s Killer Bread* and Gadoua®.
The Company intends to commence an orderly sale process shortly, ensuring that a smooth transition plan is in place as Weston Foods continues to support its customers and workforce. In the meantime, the business will continue its focus on growing sales while improving margins. The Company’s Retail and Real Estate businesses have solid balance sheets and generate strong cash flows. As a result, the proceeds from the sale of Weston Foods are likely to be returned to shareholders through share repurchases over time.
Houlihan Lokey and CIBC Capital Markets have been retained by the Company to advise on the sale process and the Company will update the market on progress as appropriate.
Weston Foods had sales of $2.1 billion and Adjusted EBITDA1 of $200 million in 2020.
Related to this announcement, a separate, joint press release with Loblaw Companies Limited is being released today.
The Company will host an investor call and audio webcast on Tuesday, March 23, 2021 at 8:30 a.m. (ET) to discuss today’s announcement. To access the conference call, please dial (647) 427-7450 or 1-888-231-8191, Access Code: 1627089. The playback will be made available approximately two hours after the event at (416) 849-0833 or 1-855-859-2056, Access Code: 1627089. To access via audio webcast, please visit the Investor Centre section of www.weston.ca. Pre-registration will be available.
About George Weston Limited
George Weston Limited is a Canadian public company founded in 1882. The Company operates through its three reportable operating segments, Loblaw Companies Limited, Choice Properties Real Estate Investment Trust and Weston Foods. Loblaw provides Canadians with grocery, pharmacy, health and beauty, apparel, general merchandise, financial services and wireless mobile products and services. Choice Properties owns, manages and develops a high-quality portfolio of commercial retail, industrial, office and residential properties across Canada. The Weston Foods operating segment includes a leading North American bakery that offers packaged bread and rolls in Canada as well as frozen and artisan bread and rolls, cakes, donuts, pies, biscuits and alternatives throughout Canada and the U.S.
| 1 See Section 14, “Non-GAAP Financial Measures”, of the Company’s 2020 Management’s Discussion and Analysis. |
| * TM of Flowers Bakeries Brands, LLC. Used under license. |
Forward Looking Statements
This press release may contain forward-looking information within the meaning of applicable securities legislation, including with respect to the announced corporate actions, which reflects the Company’s current expectations regarding future events. There can be no assurance regarding (a) the ability of the Company to successfully conclude a sale of the Weston Foods business, (b) the net proceeds to be derived from a sale, (c) the timing of such a sale, (d) the impact of this announcement or the Company’s ability to meet its stated 2021 financial outlook, or (e) other risks inherent to the Company or its operating segments’ businesses and/or factors beyond its control which could have a material adverse effect on the Company.
Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company’s control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed in the Company’s current Annual MD&A and Annual Information Form and uncertainty related to the ongoing COVID-19 pandemic. The Company does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. All forward-looking statements contained in this press release are made as of the date hereof and are qualified by these cautionary statements.
