East Balt produces and supplies buns, English muffins, rolls, tortillas, bagels, artisanal bread and other baked foods to quick-service restaurants.

MEXICO CITY — Grupo Bimbo S.A.B. de C.V. has reached an agreement to acquire Chicago-based East Balt Bakeries from One Equity Partners for $650 million. The acquisition is expected to give Grupo Bimbo additional reach in the global food service segment.

Daniel Servitje, chairman and c.e.o. of Grupo Bimbo

“East Balt brings significant expertise, a remarkable track record of profitable growth, and a geographically diverse and highly scalable platform in the food service segment, complementing our current business within this channel,” said Daniel Servitje, chairman and chief executive officer of Grupo Bimbo. “This acquisition continues to fulfill our vision of expanding our global reach to better serve more consumers, with entry to eight new countries. Notably, East Balt enjoys long-standing strategic relationships with the largest and most established Q.S.R. brands in the world. We look forward to welcoming all of East Balt’s associates to the Grupo Bimbo family and to our continued growth together.”

Founded in 1955, East Balt produces and supplies buns, English muffins, rolls, tortillas, bagels, artisanal bread and other baked foods to quick-service restaurants around the world. The company employs approximately 2,200 and operates 21 bakeries in 11 countries across the United States, Europe, Asia, the Middle East and Africa. The company generated sales of approximately $420 million and EBITDA of $70 million in the most recent fiscal year.

East Balt operates 21 bakeries in 11 countries.

Acquired by One Equity Partners, the private investment arm of JPMorgan Chase & Co., in 2012, East Balt’s roots date to 1939 when Louis Kuchuris acquired Mary Ann, a bankrupt bakery on the northwest side of Chicago that produced a line of bread, rolls, buns and pastries. Under the ownership of Mr. Kuchuris, Mary Ann serviced restaurants, snack shops, drive-ins, hotels, schools and caterers. 

The course of the business changed in 1955 when, on a handshake with Ray Kroc, Mr. Kuchuris agreed to begin supplying buns to Chicago-area McDonald’s restaurants owned by the emerging fast food pioneer.

The acquisition of East Balt is expected to give Bimbo additional reach in the global food service segment.

In 1969, Mr. Kuchuris built East Balt Commissary, an automatic bun bakery that exclusively serviced 40 McDonald’s in the Chicago area. In 2015, East Balt acquired The Wendy’s Co.’s Zanesville, Ohio-based bakery business, known as The New Bakery Co., L.L.C.

Mark Bendix, c.e.o. of East Balt, said the company is “pleased” to become a part of the Grupo Bimbo family.

Mark Bendix, c.e.o. of East Balt

“The combination between East Balt and Grupo Bimbo provides exceptional new business opportunities, including broad product capabilities, custom sandwich carriers in the food service channel and expanded global reach,” Mr. Bendix said.

Guillermo Quiroz, chief financial officer of Grupo Bimbo, said the acquisition — in terms of margins, earnings per share and profitability — supports the company’s value creation objectives.

Guillermo Quiroz, c.f.o. of Grupo Bimbo

“To fund the transaction, Grupo Bimbo will utilize an existing committed long-term revolving credit facility, which preserves the company’s financial flexibility and healthy credit profile,” Mr. Quiroz said. “After giving effect to the transaction, we expect a pro-forma total debt to adjusted EBITDA ratio of 2.8 times.”