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Acquisition | 4 Months Ended
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Apr. 19, 2025
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
Acquisition | 5. ACQUISITION On February 21, 2025, we completed the acquisition of 100% of the equity interests of Purposeful Foods Holdings, Inc., the parent company of Simple Mills, Inc., for total consideration of approximately $848.5 million, which includes $17.8 million payable to the sellers upon realization of certain tax benefits acquired as part of the transaction. Simple Mills, a market-leading natural brand offering premium better-for-you crackers, cookies, snack bars, and baking mixes, expands the company's presence in the better-for-you snacking category. The acquisition has been accounted for as a business combination. The total goodwill recorded for the acquisition was $386.9 million and is not deductible for tax purposes. The following table summarizes the preliminary fair value of purchase consideration paid for Simple Mills and the preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed based on their estimated fair value. The goodwill, identifiable intangible assets, taxes, and certain other assets and liabilities and post-close purchase price adjustments are still under review. When all relevant information is obtained, resulting changes, if any, to our provisional purchase price allocation will be adjusted to reflect new information obtained about the facts and circumstances that existed as of the respective acquisition date that, if known, would have affected the measurement of the amounts recognized as of those dates.
Fair value of consideration transferred: |  |  |
Cash consideration paid at closing |  | $ | 830,713 |
Payable to seller |  |  | 17,824 |
Total consideration |  | $ | 848,537 |
Recognized amounts of identifiable assets acquired and liabilities assumed: |  |  |
Cash and cash equivalents |  | $ | 38,833 |
Accounts receivable, net of allowances |  |  | 18,065 |
Inventories |  |  | 19,612 |
Property, plant, and equipment |  |  | 1,729 |
Operating lease right-of-use assets |  |  | 1,668 |
Customer relationships |  |  | 173,100 |
Trademarks - infinite-lived |  |  | 334,300 |
Other financial assets |  |  | 1,936 |
Total identifiable assets acquired |  | $ | 589,243 |
Current maturities of operating leases |  |  | 1,172 |
Accounts payable |  |  | 14,702 |
Other financial liabilities |  |  | 7,621 |
Deferred income taxes, net |  |  | 104,098 |
Total liabilities assumed |  | $ | 127,593 |
Total identifiable net assets acquired |  | $ | 461,650 |
Goodwill |  | $ | 386,887 |
Property, plant and equipment in the table above includes machinery and equipment and leasehold improvements. The following table presents the acquired intangible assets subject to amortization (amounts in thousands, except amortization periods):
|  | Total |  |  | Amortization years |  | Amortization Method
Customer relationships |  | $ | 173,100 |  |  | 17 |  | Straight-line
Trademarks |  |  | 334,300 |  |  | Indefinite |  | N/A
Total intangible assets |  | $ | 507,400 |  |  |  |  |
Acquisitions Pro Forma Simple Mills contributed net sales of $24.3 million and net loss of $4.2 million , which includes interest and amortization expense, net of tax impact, for the first quarter of Fiscal 2025. The following table provides the supplemental pro forma net sales and net income of the combined entity had the acquisition date of Simple Mills been December 31, 2023, the first day of Fiscal 2024 (amounts in thousands):
| For the Sixteen Weeks Ended |
| April 19, 2025 |  |  | April 20, 2024 |
Net sales | $ | 1,590,117 |  |  | $ | 1,630,003 |
Net income attributable to Flowers Foods | $ | 58,711 |  |  | $ | 52,026 |
We incurred costs of $2.0 million in the fourth quarter of Fiscal 2024 and additional costs of $13.8 million in the first quarter of Fiscal 2025 related to the acquisition. These costs are reflected in the selling, distribution, and administrative expenses line item of the Condensed Consolidated Statements of Income and are reflected in the pro forma net income for the first quarter of Fiscal 2024. The pro forma financial information also includes the following adjustments (net of tax based on statutory rates) related to the acquisition: amortization of the intangible assets and interest expense for the additional indebtedness incurred to finance the acquisition that would not have been incurred without the transaction. These adjustments increased the pro forma net income attributable to Flowers Foods for the sixteen weeks ended April 19, 2025 by $4.4 million and decreased pro forma net income for the sixteen weeks ended April 20, 2024 by $24.8 million.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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