Twinkies maker Hostess to go public
Snacks maker Hostess Brands is expected to go public later this year after its private investors rehabbed the company following a 2012 bankruptcy that nearly wiped out the company’s assets.
The owners of Hostess — private equity firm Apollo Global Management and billionaire investor C. Dean Metropoulos and his family — said Tuesday they had reached a deal to turn the Twinkies maker into a publicly traded company with an enterprise value of about $2.3 billion.
An affiliate of private-equity firm Gores Group has committed $375 million and a group of other investors including Gores Group CEO Alec Gores and others have invested $350 million to help fund the transaction, Hostess said in a statement.
Following the deal, the current owners will hold about 42% of the Gores Group affiliate that is helping to fund the transaction.
“Hostess presents a unique opportunity to invest in an iconic brand with strong fundamentals that is poised for continued growth,” Gores said in a statement. “We look forward to working with the team at Hostess as we collaborate to further capitalize on these attractive growth prospects.”
Hostess nearly collapsed in 2012 after its bankruptcy filing devolved into a brawl with its unions over the company’s distribution network and labor costs. The standoff ended in about 15,000 unionized workers losing their jobs.
The original company liquidated its assets, selling its Wonder Bread brand to Flowers Foods and selling its Twinkies, Ding Dongs and CupCakes brands to the current private-equity investors .
For a short time the liquidation triggered a nationwide rush to snap up the last remaining Hostess snack cakes as consumers flooded retail stores seeking a final junk-food fix — until it became clear the products would live on under new ownership.
The buyers created a new distribution system and reduced the company’s manufacturing footprint to three plants in Emporia, Kan., Indianapolis and Columbus, Ga.
Hostess said Tuesday it had $650 million in revenue in the 12 months ended May 31. The company projects 2016 earnings before interest, taxes, depreciation and amortization (EBITDA) of $220 million.
“We are extremely proud of all that we have accomplished together since we acquired these assets out of liquidation in 2013 and rebuilt the company into the great platform business it is today,” said Andy Jhawar, senior partner and head of the consumer and retail group at Apollo.
The Gores Group deal is expected to be completed in the third quarter.
Hostess nearly collapsed in 2012 after its bankruptcy filing devolved into a brawl with its unions over the company’s distribution network and labor costs.