10/24/2013 10:50 EDT | Updated 01/23/2014 06:58 EST

Canada Bread sells Olivieri Foods pasta business to Spanish company for $120M

TORONTO - Canada Bread Company Ltd. (TSX:CBY) says it has sold Olivieri Foods, its fresh pasta and sauce business, to Spanish-based Ebro Foods in a $120-million deal.

Pending regulatory approval, the purchase is expected to close by the end of the year.

Olivieri Foods, which had total sales in 2012 of $105.5 million, employs 375 people in Hamilton, Ont., and Delta, B.C.

"This sale represents an excellent opportunity to optimize the value of our fresh pasta business, while realizing its potential under a company dedicated to expanding in the global pasta industry," said Richard Lan, President and CEO.

Ebro is a multinational food group in the rice, pasta and sauces sectors.

Earlier this week, Canada Bread's majority owner, Maple Leaf Foods (TSX:MFI) said it was exploring options with its bakery business, including putting it up for sale.

Maple Leaf has been scouring its operations for cost savings as part of a seven-year restructuring plan that would improve the profits of the overall business, which is primarily focused on meat products.

If a deal materializes, popular brands like Dempster's and Tenderflake would find themselves in the hands of a new owner.