IRVING, TEXAS — Since Hostess Brands, Inc. announced on Nov. 15 that it would shutter operations and move to liquidate its assets, the media has been rife with speculation over companies and private equity firms poised to step forward as potential buyers for the company in part or as an ongoing concern. The list ranges from the largest players in the wholesale bread industry to relatively obscure investment firms with no previous experience in the food industry. While not an exhaustive roster of everyone who has been mentioned as a potential suitor, the list includes:
Sun Capital Partners, Inc.
Headquarters: Boca Raton, Fla.
With assets under management totaling $8 billion, Sun Capital affiliates have invested in more than 305 companies worldwide since the group’s inception in 1995, with combined sales in excess of $45 billion.
Sun Capital’s investments in the food and beverage space include: Contessa Premium Foods, a U.S. processor and distributor of seafood and frozen convenience meals; Creekstone Farms Premium Beef, a beef processor whose customer base is 50% food service and 50% retail; and Harry’s Fresh Foods, a producer of home-style refrigerated foods that serve the retail and food service markets with soups, entrees, sides, sauces and desserts.
“I think that we could offer a slightly better, more labor-friendly deal than what was on the table last week,” Marc Leder, co-chief executive officer of Sun Capital, told Fortune.
C. Dean Metropoulos & Co.
Headquarters: Greenwich, Conn.
Metropoulos has been a “player” in grain-based foods for many years, repeatedly appearing as a buyer or a suitor in the industry. Over the past 25 years, Metropoulos & Co. has invested in and managed several branded consumer businesses assembled through more than 65 acquisitions in the United States, Europe and Latin America involving more than $10 billion. These businesses include Stella Foods, The Morningstar Group, Ghiradelli Chocolate, International Home Foods (Chef Boyardee, PAM, Bumble Bee Seafood, Gulden's mustard and other brands), Pinnacle Foods (Swanson, Hungry Man, Vlasic pickles and other brands), which merged with Aurora Foods (Dunkin Hines, Aunt Jemima, Lenders bagels and other well-known brands), Mumm and Perrier Jouet Champagnes of France, Hillsdown Holdings of the U.K., Del Monte Foods of Mexico among others.
“Our family would love to purchase these iconic brands,” Daren Metropoulos, a principal at Metropoulos & Co. told Businessweek. “We are actively pursuing this deal as no doubt strategics will also.”
Hurst Capital LLLP
Headquarters: Sarasota, Fla.
Source: Sarasota Herald Tribune
The company, which is run by 26-year-old Austin Hurst and his twin brother, Zach, has never completed an acquisition larger than about $1 million, but has filed a letter of intent that details its multimillion dollar offer to acquire all the assets of Hostess Brands.
Hurst Capital maintains a diverse range of investments spanning web technology and consumer products, including a full-service design and development agency named Dominant Design Group, and Empirical Sports, L.L.C., which makes The Home Catcher, a baseball pitching training aid.
“It’s true, we don’t have any experience in consumer brands,” Austin Hurst, Hurst Capital’s managing general partner, told the Sarasota Herald Tribune. “And this would be the biggest deal we’ve ever done.”
Flowers Foods, Inc.
Headquarters: Thomasville, Ga.
Source: Chicago Tribune
Flowers Foods is the second-largest producer and marketer of packaged bakery foods for retail and food service customers in the United States with 2011 sales of $2.8 billion. Flowers operates 44 bakeries that produce a wide range of bakery products. These products are sold through a direct-store delivery network with access to approximately 70% of the U.S. population in the East, South, and Southwest as well as in certain markets in California. Select Flowers products are sold nationwide through customers' delivery systems. Among the company’s top brands are Nature’s Own and Tastykake.
Flowers on Nov. 19 amended its $500 million credit facility in a way that gives it a new five-year term and modest improvements in pricing. The company said the loan may be used for capital expenditures, acquisition financing, refinancing of debts, dividends or share repurchases.
“This amendment to our credit facility positions us to take advantage of an assortment of opportunities as we work to achieve our expansion goals,” said R. Steve Kinsey, chief financial officer.
Grupo Bimbo S.A.B. de C.V.
Headquarters: Mexico City
Source: Christian Science Monitor
Grupo Bimbo is one of the world’s largest baking companies, with 153 plants and more than 1,000 distribution centers strategically located in 19 countries of America and Asia.
Through its main subsidiaries, the company produces, distributes and markets 10,000 products within the categories of sliced bread, sweet baked goods, home-made type pastry, cookies, English muffins, cereal bars, confectionary, chocolates, sweet and salted snacks, packaged corn tortillas and wheat flour tortillas, tostadas, cajeta and pre-packaged food, among others. Additionally, the company has more than 150 trademarks, including: Bimbo, Marinela, Tía Rosa, Lara, El Globo, Barcel, Ricolino, Oroweat, Arnold, Mrs. Baird’s, Thomas’, Brownberry, Enternmann’s, Ideal, Plus Vita, Pullman, Sara Lee and Monarca, among others. The company also has one of the world’s largest distribution networks with more than 51,000 routes and more than 127,000 employees.
In an interview with Bloomberg Television, Hostess chief executive officer Gregory Rayburn said Grupo Bimbo is not a potential bidder for Hostess.
“One misconception in the market is that Bimbo would be a buyer and bakery leadership told us in several plants that Bimbo would come in and buy, which is absurd,” Mr. Rayburn said. But he pointed to Bimbo’s agreement with the U.S. Department of Justice to sell some Sara Lee brands in order to complete its acquisition of Sara Lee’s North American bakery business as an example of why it won’t happen.
“Due to antitrust, it would never happen,” he said.
McKee Foods Corp.
Headquarters: Chattanooga, Tenn.
Source: Christian Science Monitor
A privately-held, family-run company has grown from a three-person bakery to a group of companies that employs more than 6,000 and has annual sales in excess of $1 billion. The company’s products are available across the United States, in Canada, Mexico, and Puerto Rico, and on U.S. military bases around the world.
McKee Foods is best known for its line of Little Debbie snack cakes, but the company also makes 27 different family pack snacks and granola cereals under the brand name Sunbelt. The products are found in the granola bar section of retail stores. Recently the company introduced Fieldstone, a brand of cookies, breakfast pastries and other snacks targeted to meet the needs of the food service industry.
Mike Gloekler, a spokesman for McKee Foods Corp., told the Dallas Morning News Hostess is leaving behind a “very damaged business.” Mr. Gloekler expressed skepticism over whether anyone would step forward to buy Hostess as a going concern.
“I don’t know that anybody would risk that,” he said.
ConAgra Foods, Inc.
Headquarters: Omaha, Neb.
Source: ABC News
ConAgra is one of North America’s leading food companies, with brands in 97% of America’s households. The company employs more than 26,000 people and had fiscal 2012 sales of more than $13 billion. The company’s Consumer Foods segment makes and sells branded, private label and customized food products to retail and food service channels, principally in North America, while its Commercial Foods segment makes and sells a variety of specialty food and ingredient products principally to food service, food manufacturing and industrial customers worldwide. The company’s brands include Banquet, Chef Boyardee, Healthy Choice, Marie Callender’s, and Orville Redenbacher’s.
Marcia Mogelonsky, director of insight for Mintel Food & Drink, told The Inquisitor that she believes ConAgra Foods, as “one of the big orphan brand adopters,” could be among the companies interested in purchasing the Twinkies brand. MBN