Is Hostess for Sale Again?

Nov. 14, 2014
Three media reports say sale could come in early 2015, potentially valuing the company at $1.7 billion.

The investment firms owning Hostess Brands LLC may be planning to put the iconic baker on the market in early 2015, potentially valuing it at more than $1.7 billion, a nice multiple of the $410 million they bought it for in 2013.

Fortune magazine online carried a Reuters story Nov. 14 citing unnamed sources -- "people familiar with the matter" – who say Apollo Global Management and C. Dean Metropoulos, which bought Hostess Brands out of bankruptcy, have received inquiries from potential buyers and are having conversations with investment banks about advisory roles they may play in a potential sale.

Also cited was a New York Post story from Nov. 11.

The Fortune/Reuters story noted a "remarkable turnaround in the past year and a half" achieved by Apollo and Metropoulos, quoting sources that estimated Hostess' annual earnings before interest, tax, depreciation and amortization of around $170 million. We at Food Processing estimate its 2013 annual sales at $1 billion.

Once a $3 billion company (as Interstate Bakeries), heavy debt, wage and pension obligations forced Hostess into bankruptcy, first in 2004 then in 2012. The second time, the company was liquidated, with various assets and brands going at auction to Flowers Foods, United States Bakery, McKee Foods and Grupo Bimbo.

The operations owned by Metropoulos and Apollo, based in Irving, Texas, make snack cakes, including Twinkies, Ho Hos, Ding Dongs and Donettes.

Sponsored Recommendations

Learn About: Micro Motion™ 4700 Config I/O Coriolis Transmitter

An Advanced Transmitter that Expands Connectivity

Micro Motion™ G-Series Coriolis Flow and Density Meter

Micro Motion G-Series: market-leading compact design featuring advanced process diagnostic capability.

Embracing Sustainability using Advanced Measurement Instrumentation

A practical guide to greeningyour brewing operationsusing advanced measurementinstrumentation.

Get Hands-On Training in Emerson's Interactive Plant Environment

Enhance the training experience and increase retention by training hands-on in Emerson's Interactive Plant Environment. Build skills here so you have them where and when it matters...