Oakbrook, Illinois-based Sara Lee Frozen Bakery has agreed to acquire Fresh Foods Corporation of America, the Airway Heights-based company that does business as Cyrus O’Leary’s Pies.

A spokeswoman for Sara Lee declines to disclose terms of the transaction, but says the acquisition is expected to be completed by the end of March. Cyrus O’Leary’s Pies, which is headquartered at 1528 S. Hayford Road and distributes to every state in the U.S., will keep its name, as well as all 115 current employees.

Cyrus O’Leary’s CEO Barclay Klingel, who has been with the company for 30 of its nearly 40 years in business, says he turned down several offers for Cyrus O’Leary’s Pies.

“We had no intentions of selling,” Klingel says. “At the same time, we didn’t have a meaningful succession plan in place.”

When a representative of Sara Lee approached Klingel last March, he says his interest was piqued. 

“Because it’s Sara Lee — they’ve been around since the 1930s, and it’s an iconic brand — I took it very seriously as a potential opportunity,” Klingel says.

Klingel signed a nondisclosure agreement with Sara Lee later that month, and by September, the companies had entered a letter of intent. Klingel will remain with Cyrus O’Leary’s Pies and will report directly to Sara Lee CEO Craig Bahner.

Klingel says the support Sara Lee can give Cyrus O’Leary’s Pies was a major part of the decision to sell.

“The capital and backing that Sara Lee has was an important part of this,” he says. “It allows us to have the foundation for continuing to grow this business.”

The acquisition has other benefits, Klingel says. For example, Cyrus O’Leary’s Pies will have access to Sara Lee’s newly-constructed research and development center at Sara Lee headquarters. 

“It will give us additional resources for product development,” Klingel says.

For Sara Lee’s part, Klingel says that company has been working to expand beyond the food service industry and grocery store frozen dessert aisles.

“Their objective is to grow the in-store bakery market in grocery stores,” Klingel says. “They haven’t penetrated that market very well, and that’s the core of our business.”

The acquisition of Cyrus O’Leary’s Pies also opens up a gateway, from a manufacturing perspective, to the West Coast for Sara Lee. The company currently has manufacturing facilities in Massachusetts, North Carolina, and Michigan.

Klingel says he will hire additional employees as the company grows, but he doesn’t have plans in place yet.

The business started as Cyrus O’Leary’s Restaurant in downtown Spokane in 1981. The restaurant introduced a line of gourmet pies, and by 1987 the company had established a wholesale plant in Spokane.

In 2001, the company bought its current 30,000-square-foot building on six acres in Airway Heights. The downtown restaurant closed in 2011.

Cyrus Vaughn, the founder of the company, sold 50% interest in the business to Klingel in 1990. Klingel says Vaughn will no longer have a stake in the company once the sale to Sara Lee is finalized.