KANSAS CITY — Hostess Brands, Inc. has launched a public offering of approximately 20.1 million shares of its Class A common stock held by certain of its stockholders.
As part of the offering, affiliates of Apollo Global Management, L.L.C. will offer approximately 18.7 million shares, Gores Sponsor L.L.C. will offer approximately 900,000 shares, and an entity controlled by C. Dean Metropoulos will offer approximately 500,000 shares.
Shares of Hostess Brands, Inc. opened at $15.35 on April 10, climbing to a high of $15.60 before closing at $15.21, down from a close of $15.82 on April 7. Based on the stock’s closing price on April 10, the offering of 20.1 million shares may have a value exceeding $305 million.
According to terms of the offering, the underwriters will have a 30-day option to purchase up to an additional approximately 3 million shares from the selling stockholders on a pro rata basis. Hostess said it will not issue shares in the offering and will not receive any proceeds from the sale of the shares by the selling stockholders in the offering.
Credit Suisse and Morgan Stanley are acting as joint book-running managers for the proposed offering and as representatives of the underwriters. Barclays, Deutsche Bank Securities, RBC Capital Markets and UBS Investment Bank are also acting as joint book-running managers for the proposed offering.
Pro forma net revenue at Hostess Brands increased 17% to $727,586,000 in the fiscal year ended Dec. 31, 2016, which compared with $620,815,000 in the previous fiscal year. New product launches accounted for $44 million in revenue, and the recently acquired Superior Cake Products, Inc. contributed another $26.7 million.Pro forma net income for the fiscal year was $82,442,000, or 55c per share on the common stock, a decrease of 7% from $88,760,000 in the previous fiscal year primarily resulting from the income tax provision for 2016.