Hostess confirms court approval of largest sales

by Jeff Gelski
Share This:
Search for similar articles by keyword: [Hostess Brands], [Grupo Bimbo]

KANSAS CITY – Hostess Brands, Inc. said on March 20 that it has obtained bankruptcy court approval to sell the majority of its snack cake business and the majority of its bread business in separate transactions totaling about $800 million in proceeds.

As of mid-day, the judge’s orders approving the transactions had been posted on-line for the Hostess/Dolly Madison brand snack cake sale and the Beefsteak brand rye bread sale. The largest bread brand sale, including the Wonder brand, had not yet been posted.

“We embarked on the sales process with one overarching goal – to maximize value for all of the company’s stakeholders, and I am pleased to report that we have been successful,” said Gregory F. Rayburn, chairman and chief executive officer of Hostess, Irving, Texas.

Hostess said Robert Drain, a U.S. bankruptcy judge, approved the following transactions:

• The acquisition by affiliates of Apollo Global Management, L.L.C. and Metropoulos & Co. which agreed to pay $410 million for the assets of the majority of the snack cake business. The sale price was the same as the stalking horse bid announced Jan. 30. The assets include Hostess and Dolly Madison branded products such as Twinkies, Ho Hos, Ding Dongs and Donettes as well as five bakeries and certain equipment.
• The acquisition by Flowers Foods, Inc., Thomasville, Ga., which agreed to pay $360 million for the majority of the bread business. The transaction includes brands such as Wonder, 20 bakeries, 38 depots and other assets. Under a stalking horse bid announced Jan. 11, Flowers would have paid $350 million in cash (up to $360 million if certain license rights were included in the sale).
• The acquisition by affiliates of Grupo Bimbo, S.A.B. de C.V., Mexico City, which agreed to pay $31.9 million for the Beefsteak bread brand. Flowers Foods originally was selected as a stalking horse bidder for the Beefsteak brand in a transaction that would have carried a purchase price of $30 million.

Hostess Brands previously employed workers from the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.

“Throughout this arduous process, our membership has believed that the key to these brands’ survival was strong, new ownership and a sustainable business model,” said David B. Durkee, president of the B.C.T.G.M. International. “Indeed, new ownership has signaled a clear intent to accelerate this process and return products back to the shelves as soon as this summer.”

Hostess Brands on April 9 will seek court approval for two more transactions. McKee Foods Corp., Collegedale, Tenn., has offered to pay $27.5 million for the Drake’s snack cake brand and certain equipment. United States Bakery, Portland, Ore., has offered to pay about $30.9 million for bread brands in the Northwest such as Sweetheart, Eddy’s, Standish Farms and Grandma Emilie’s as well as four bakeries, 14 depots and certain equipment.

Mr. Rayburn in late January said all the stalking horse bids set a floor of more than $850 million for the bulk of the company’s assets.

Comment on this Article
We welcome your thoughtful comments. Please comply with our Community rules.



The views expressed in the comments section of Baking Business News do not reflect those of Baking Business News or its parent company, Sosland Publishing Co., Kansas City, Mo. Concern regarding a specific comment may be registered with the Editor by clicking the Report Abuse link.


By Dave Walker 3/21/2013 1:25:30 AM
To reward our stakeholders. That was Rayburn's mission since day one,only the IBT threw him a curve by approving yet another slew of cuts,but in the end the BCTGM strike bailed him out. What I want to know,where is the voice of the worker that went through hell since 2004 wondering day to day how long his/her jobs would last? The company wasn't even courteous enough to pay us our accrued vacation pay,but,they made damn sure the stakeholders got their due. What were we?