Loan facility to help Flowers pay for Hostess acquisition

by Jeff Gelski
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THOMASVILLE, GA. – Flowers Foods, Inc. has entered into a senior unsecured delayed-drawn term loan facility with a commitment of up to $300 million. The facility will help finance the pending acquisition of certain brands and assets of Hostess Brands, Inc. and pay certain acquisition-related costs and expenses, Thomasville-based Flowers Foods said April 8.

Deutsche Bank AG New York Branch and Bank of America, N.A., served as agents for the syndicate of lenders that participated in the financing.

Last month Robert Drain, a U.S. bankruptcy judge, approved an acquisition by Flowers Foods, which agreed to pay $360 million for the majority of the bread business of Hostess. The transaction includes brands such as Wonder, 20 bakeries, 38 depots and other assets.

Also on April 8, Flowers Foods said it has amended its existing $500 million senior unsecured revolving loan facility and existing unsecured term loan. The amendments provide for less restrictive leverage ratios and certain more favorable covenant returns; update the base forms of the existing agreements to address changes in law; and include applicable conforming changes in light of the new term loan.

“We are pleased to have financing in place for the pending acquisition of the Hostess bread assets,” said R. Steve Kinsey, executive vice-president and chief financial officer of Flowers Foods. “The regulatory review of the proposed acquisition is under way, and we look forward to completing the Hostess transaction once that review is completed. The new term loan balances near-term and longer-term debt and will allow us to deliver in keeping with our long-term financial objectives.”
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