by Judie Bizzozero, Senior Editor
KANSAS CITY, Mo.—Hostess Brands, Inc., accepted a stalking horse bid of $410 million from investment firms Apollo Global Management LLC and Metropoulos & Co. for the majority of its snack cake business that includes Hostess® and Dolly Madison® branded products.
Apollo and Metropoulos agreed to pay $410 million to purchase the brands, five bakeries and certain equipment. Among the products included are the company's Twinkies®, Ho Hos®, Ding Dongs® and Donettes® snack cakes. Hostess Brands will ask the U.S. Bankruptcy Court for the Southern District of New York to approve the transaction at a hearing on March 19.
"The agreement results in significant value for our stakeholders and we look forward to putting the proposed transaction before the Court next week," said Hostess Brands Chairman and CEO Gregory F. Rayburn.
Dean Metropoulos, founder of Metropoulos said, "Our family is thrilled to have the opportunity to reestablish these iconic brands with new creative marketing ideas and renewed sales efforts and investment. We look forward to having America's favorite snacks back on the shelf by this summer. We are also ecstatic to bring jobs back to many cities across the country."
On Feb. 28, Flowers Foods, Inc., won its $360 million stalking horse bid for the majority of Hostess Brands’ bread business assets, including Wonder, Nature's Pride, Merita, Home Pride and Butternut bread brands; 20 bakeries; and approximately 38 depots. 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. The court also will consider approval of these brands at the same March 19 hearing for the Hostess® and Dolly Madison® brands.
Hostess Brands also announced its will conduct an auction for its Drake's® snack cake business and Sweetheart®, Standish Farms®, Grandma Emilie's® and Eddy's® bread businesses on March 15. The combined stalking horse bids for those assets total approximately $56.6 million.
On Nov. 16, 2012, the maker of such American snack and bakery staples as Twinkies, Ding Dongs and Wonder Bread filed a motion in U.S. Bankruptcy Court to shutter its operations and liquidate its assets as a result of a weeklong strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTGM) International Union.
The Board of Directors authorized the wind down of Hostess Brands to preserve and maximize the value of the estate after one of the company’s largest unions, BCTGM, initiated a nationwide strike.
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.