The Work

August 9, 2011 5:31 PM

Kirkland, Bryan Cave Advise on Ralcorp's Bid for Sara Lee Dough Unit

Posted by Tom Huddleston Jr.

Ralcorp Holdings, Inc., is shelling out some cash to get a lot of dough in return.

The St. Louis–based food company plans to purchase Sara Lee Corporation's North American refrigerated dough unit for $545 million, the companies announced Tuesday. The dough business, which generated $300 million in sales last year, makes products that supermarkets and other retailers stamp their own names on. The unit is to be rolled into a Ralcorp division that makes pizzas, rolls, waffles, and other frozen goods.

Sara Lee turned to Chicago-based Kirkland & Ellis corporate partners Keith Crow and Kevin Morris as outside counsel on the transaction. The firm has worked on various matters for Sara Lee in the past, including the 2006 spin-off of Hanesbrands. Sara Lee's general counsel is Paulette Dodson.

Ralcorp is being advised on the deal by longtime counsel Bryan Cave, with St. Louis-based M&A partner Stephanie Hosler leading the firm's team. Hosler has advised Ralcorp on such past deals as the company's $1.2 billion acquisition of the American Italian Pasta Company in 2010 and the $2.6 billion pick-up of the Post cereal unit from Kraft Foods in 2007. Gregory Billhartz is general counsel for Ralcorp.

Sara Lee has spent the past several years shedding business units and narrowing its focus on improving the profitability of such well-known brands as Jimmy Dean sausage, Ball Park hot dogs, and the company's namesake desserts.

In 2009 the company sold its global personal care and European detergent business to Unilever for $1.9 billion. The following year, Sara Lee unloaded its North American bakery unit to Grupo Bimbo for $959 million. (Freshfields Bruckhaus Deringer advised Sara Lee on the Unilever deal, while Sidley Austin represented the company in the Grupo Bimbo transaction.)

Sara Lee is currently in the process of splitting into two separate food and beverage companies, with the beverage business being spun off to shareholders. Sara Lee announced the split in February; Skadden, Arps, Slate, Meagher & Flom is advising on the matter.

Ralcorp is doing some spinning-off of its own, shifting its recently acquired Post cereal unit to shareholders, with Wachtell, Lipton, Rosen & Katz and Bryan Cave advising. The proceeds from that move should help pay back short-term debt being used to buy the Sara Lee unit, The New York Times notes. Ralcorp is also fending off the advances of ConAgra Foods, which made a $4.9 billion unsolicited offer for the company in May. Bryan Cave is advising Ralcorp in that matter.

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