THOMASVILLE, Ga.—Flowers Foods, Inc., announced its $360 million stalking horse bid for Hostess Brands, Inc.'s Wonder, Nature's Pride, Merita, Home Pride and Butternut bread brands; 20 bakeries; and approximately 38 depots was declared the highest and best bid for such assets, eliminating the need for the auction that had been scheduled for Feb. 28.
In a separate deal, Grupo Bimbo, S.A.B. de C.V. was selected as the winning bidder for the assets related to the Hostess’ Beefsteak bread business. Grupo Bimbo agreed to pay $31.9 million for the Beefsteak assets.
Both bids will be forwarded to the U.S. Bankruptcy Court for the Southern District of New York for approval during a hearing slated for March 19, 2013.
"We are pleased Flowers won the bid for Hostess' primary bread brands and bakeries without the need for an auction," said George E. Deese, Flowers Foods' chairman of the board and CEO. "Now we move forward with the next step, which is the bankruptcy court review. Following that, the transaction will continue through the regulatory process before it can be finalized. We expect it could be several months yet before it's finalized."
On Jan. 11, 2013, Flowers Foods announced its agreement with Hostess to be the stalking horse bidder for certain Hostess bread bakeries and bread brands. If Flowers is ultimately successful in its acquisition of these assets, they will fit with the company's long-term growth objective to reach more of the U.S. population with its fresh breads, buns and rolls.
"Since 2004, our company has expanded the reach of our fresh bakery products from about 38% of the U.S. population to more than 70% today," Deese said. "We accomplished this by expanding into new markets from our existing bakeries, building new bakeries, and through strategic acquisitions. We have proven experience in integrating acquisitions, having completed more than 100 since 1968 and three significant ones in just the last three years—Tasty Baking, Lepage Bakeries, and the Sara Lee and Earthgrains brands in California."
On Nov. 21, 2012, the U.S. Bankruptcy Court for the Southern District of New York approved Hostess Brands’ emergency interim motion for the orderly wind down of its business and sale of its assets after the company and the Bakery, Confectionary, Tobacco and Grain Millers Union (BCTGM) were unable to reach an agreement during an 11th-hour mediation.
The shuttering of Hostess business operations resulted in the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes, 570 bakery outlet stores and the loss of 18,500 jobs. Hostess Brands said it would sell its popular brands, including Hostess®, Drakes® and Dolly Madison®, which make iconic cake products such as Twinkies®, CupCakes, Ding Dongs®, Ho Ho’s®, Sno Balls® and Donettes®. Bread brands to be sold include Wonder®, Nature’s Pride®, Merita®, Home Pride®, Butternut® and Beefsteak®, among others.