Article/Intelligence
Kohlberg’s Sara Lee Frozen Bakery Prepping for Sale Process
Kohlberg & Co. portfolio company Sara Lee Frozen Bakery is planning to launch an auction process after Labor Day, according to multiple sources familiar with the situation.
The company, which is best known for its frozen pound cakes, generates about $100 million in EBITDA, the sources said.
Sara Lee has been a relatively long-term hold for Kohlberg, which acquired the business from Tyson Foods along with several other brands for undisclosed terms in 2018. Rothschild advised Tyson on the transaction, according to a press release.
The company has made a number of add-on acquisitions under Kohlberg’s ownership, including its purchase of Superior Cake Products from Hostess Brands for $65 million in 2019 and Cyrus O’Leary’s Pies in 2020.
While the auction is yet to launch, one of the sources said the bidding pool for Sara Lee is expected to consist entirely of financial sponsors.
Recent private equity-led deals in the baked goods space include Platinum Equity and Butterfly Equity’s acquisition of Rise Baking last fall. Although terms of the transaction were not publicly disclosed, Octus reported last October that the deal valued Rise at about $2 billion, which would imply a multiple of roughly 8x its $255 million in LTM EBITDA.
Rise tapped the primary market to fund the acquisition in October 2024 with a $400 million term loan due 2031, which priced wide to talk at SOFR+500 bps and 98.5 OID. The debt financing also included an upsized $900 million 8.625% senior secured note offering, which priced at par.
Other in-market baked goods deals include New Water Capital-backed Kloseterman Baking Co., which is in the late stages of a Houlihan Lokey-led auction process, Octus reported on Aug. 20. The company is aiming to fetch 9x to 10x its approximately $25 million to $30 million in EBITDA if a deal is struck, as reported.
According to Octus’ BDC Database, Sara Lee Frozen Bakery has a first lien term loan maturing in July 2027. Its business development company debtholders include Nuveen Churchill Direct Lending Corp. and Blue Owl Capital Corp.
Average pricing on senior direct debt to back M&A in the consumer staples sector (which includes food & beverage) was roughly SOFR+521.88 bps in the second quarter of 2025, down slightly from an average of SOFR+525 bps in the first quarter, according to Octus’ Private Credit Dashboard.
Kohlberg declined to comment. Sara Lee did not return a request for comment.
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