Hostess moves ahead with auction for Drake’s, Northwest bread brands
IRVING, TEXAS — Hostess Brands, Inc. will conduct an auction on March 15 for its Drake’s snack cake business and Sweetheart, Standish Farms, Grandma Emilie’s and Eddy’s bread businesses. The combined stalking horse bids for the assets total approximately $56.6 million.
Hostess declined to elaborate on further details, such as what companies or firms may have stepped forward to submit qualified bids for the businesses by yesterday’s 5 p.m. EST deadline.
As it stands, McKee Foods Corp., Collegedale, Tenn., is the stalking horse bidder for the Drake’s snack cake business with a bid of $27.5 million. Not included in the transaction are any production or other facilities, including the Hostess plant in Wayne, N.J., where Drake’s snack cakes were baked.
Meanwhile, Portland, Ore.-based United States Bakery, also known as Franz Family Bakeries, is the stalking horse bidder for several Hostess brands located in the Northwest, including Sweetheart, Eddy’s, Standish Farms and Grandma Emilie’s. Under the agreement, United States Bakery would pay $28.85 million in cash for the brands, 4 baking plants, 14 depots and other assets.
Also yesterday, Hostess Brands confirmed the stalking horse bid submitted by affiliates of Apollo Global Management, L.L.C. and Metropoulos & Co. for the majority of the company’s snack cake business, which includes both Hostess and Dolly Madison branded products, will be the bid presented for approval to the U.S. Bankruptcy Court as no other qualified bids were received for those assets.
Apollo and Metropoulos have 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. The company will ask the U.S. Bankruptcy Court 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 Gregory F. Rayburn, chairman and chief executive officer of Hostess Brands.
As previously announced, Flowers Foods, Inc. has agreed to pay $360 million for the majority of the bread business assets. The agreement includes, in addition to the brands, 20 bakeries, 38 depots and other assets. In a separate transaction, Grupo Bimbo, S.A.B. de C.V. was selected as the winning bidder for the assets related to the company’s Beefsteak bread business at the conclusion of a Feb. 28 auction. Grupo Bimbo has 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.