Dave's Killer Bread Sold to a Georgia Company for $275 Million

Dave Dahl's gamble on organic bread has paid off in a big way, despite his public fall from grace.

Dave's Killer Bread, the Milkwaukie-based family bakery Dahl transformed a decade ago with seed-laden, whole-grain loaves, announced tonight it will soon be sold to Georgia-based company Flowers Foods for $275 million in cash.

That's the result Dahl and brother Glenn Dahl hoped for in 2012, when they sold a 50-percent stake in Dave's Killer Bread to New York-based private equity firm Goode Partners. Goode specializes in taking regional brands and launching them nationally.

The firm invested partly in Dahl's redemption narrative: Each bread wrapper told how he returned to the family bakery after more than a decade behind bars for dealing methamphetamine.

That narrative was imperiled by Dahl attacking Washington County Sheriff's deputies with his SUV during a November 2013 breakdown. Last year, Dahl accepted a judge's verdict of guilty except for insanity.   

WW examined Dahl's repeated troubles in a 2014 profile. An industry expert said then that Dahl's attack on police brought new risks to a potential sale.

“It probably wouldn’t stop me from buying,” said John von Schlegell, managing director of Endeavor Capital, a Portland-based private equity firm that has invested in WinCo Foods and New Seasons Market. “It would go into the reward-risk calculations. Everybody knows he had rehab issues, and that’s part of the mystique.”

Flowers Foods is the nation's second-largest bread chain, best known for the Nature's Own brand—America's top-selling loaf.

Dave Dahl remains on leave from Dave's Killer Bread, according to a recent Facebook post.

WWeek 2015