08:30 AM EST, 01/08/2025 (MT Newswires) -- Flowers Foods ( FLO ) said Wednesday it has agreed to acquire Simple Mills for $795 million in cash from Katlin Smith, Simple Mills management, Vestar Capital Partners, and initial angel investors.

The company said the acquisition increases its position in the healthy snack market and improves the company's growth and margin prospects. It added that it expects the acquisition to be accretive to net sales immediately and to earnings per share in 2026.

On closing, which is expected in Q1, Simple Mills will become an independent subsidiary of Flowers Foods ( FLO ) and continue to be led by its current leadership team, the company said.

Flowers Foods ( FLO ) also said it has entered into a binding commitment letter for a $795 million term loan from Royal Bank of Canada ( RY ) to help fund the transaction.

FLO shares were edging 0.4% higher in recent premarket activity.