Flowers Foods, Thomasville, Ga., expanded its grasp on the Texas market by agreeing to buy the assets of a bread and bun bakery in Houston. Sara Lee Bakery Group, St. Louis, currently owns the plant and had previously announced that it was ceasing production at the plant in September.

The acquisition will complement Flowers Foods' new bakery that is currently being constructed in Denton, Texas. According to George Deese, Flowers Foods' president and chief executive officer, the company will acquire the closed bakery and use its bakery equipment as needed. This need could potentially come from Flowers Foods' rapidly expanding direct-store-delivery area.

As terms of the transaction, Flowers Foods will acquire lists of associated private label and foodservice customers that Sara Lee Bakery Group currently serves in selected Texas markets.

According to Sara Lee, the divestiture of the Houston bakery was part of its strategy for exiting unprofitable private label business in the Central Texas region. The company also announced that it was closing its San Antonio, Texas, bakery. The branded production of these two bakeries will be shifted to the company's facility in Dallas. The company said that 306 people will be laid off as a result of the closures.