August 9/Downers Grove, Ill./ -- Ralcorp Holdings Inc. said it is buying Sara Lee Corp's North American private brand refrigerated dough business for about $545 million.

The sale is the latest in a series of divestures for Sara Lee since 2006 that has seen the sale of a wide range of businesses like Coach handbags, North American bakery business, global body care and European detergents business among others.

Sara Lee's refrigerated dough business is a manufacturer and distributor of a full range of private brand refrigerated dough products in the United States.  The business recorded net sales in excess of $300 million for its fiscal year ended July 2010. 

The refrigerated dough business includes private label toaster pastries and specialty biscuits that are sold to retailers. The division has plants in Georgia and Texas and has about 700 employees.

The acquisition is expected to enhance Ralcorp's cash flow and generate operational synergies of approximately $6 million to $8 million annually after the third year post-closing, excluding one-time transition costs. 

Ralcorp, the third-largest maker of cereal in the ready-to-eat category, behind Kellogg and General Mills said that the acquisition will make it a private-brand leader in the $1.8 billion refrigerated dough category.

St. Louis-based Ralcorp, with $4 billion in sales last year, makes post branded cereals, a variety of private-brand foods sold under the individual labels of various grocery, mass merchandise and drugstore retailers, and frozen bakery products sold to in-store bakeries, restaurants and other foodservice customers.

In March 2011, Omaha-based packaged foods company ConAgra Foods made an unsolicited offer to buy Ralcorp, and in May sweetened its bid to $86 a share, or $4.9 billion.

Rejecting the bid as too low, Ralcorp adopted defensive measures by announcing that it plans to spin off its Post Foods cereal business unit, the most recognisable cereal brands in the U.S., which also includes Honey Bunches of Oats, Grape-Nuts, Raisin Bran, Golden Crisp, Pebbles and Waffle Crisp, as a standalone company from its core private label business.

Sara Lee, whose businesses include Hillshire Farm lunchmeats and Sara Lee bread, has been focusing on its main food and beverage businesses as it remakes its portfolio. In the past two years, the Illinois-based company has shed several of its non-food units for nearly $3 billion.

It sold its European body-care business in 2009 to Unilever for $1.88 billion in cash and parts of its Ambi Pur air freshener business to Procter & Gamble Co for €320 million.

In India Sara Lee sold its 51% stake last year in its joint venture with the Godrej group, Godrej Sara Lee, to Godrej Consumer Products for $230 million. It also divested its cleaning products division in Australia and New Zealand for about $50 million.

In January 2011, the company announced that it will split its food and beverage businesses into two separate companies by 2012. The food business, which had revenue of $4.1 billion last year, includes meat products like Jimmy Dean and Ball Park, will be spun off into a new public company with the Sara Lee brand name.

The beverage company, which generated $4.6 billion sales last year, will include a number of coffee brands, like Douwe Egberts, Senseo and Pickwick.

From the August 9, 2011,Prepared Foods' Daily News.