Three years after being taken private and resuscitated by private owners, Hostess Brands will undertake a two-step deal that will give it a new majority owner and return it to the stock market.
It's a complex transaction, but Gores Holdings Inc. has been created as a "special purpose acquisition company" by investment fund Gores Group LLC. C. Dean Metropoulos and his Apollo Global Management LLC, which bought Hostess in 2013 during its bankruptcy liquidation, will transfer ownership to Gores Holdings but will hold a 42 percent stake in Gores Holdings.
Gores Holdings is expected to reintroduce Hostess as a publicly listed company, perhaps late this year, with an anticipated initial enterprise value of approximately $2.3 billion or 10.4 times the company’s estimated 2016 earnings of approximately $220 million. Sales are estimated at $650 million.
Metropoulos will stay on as executive chairman; so will CEO William Toler. Metropoulos and his Apollo Global Management bought Hostess for $410 million.
In the notice of the impending Hostess transaction, Metropoulos also noted his recent acquisition of Superior Baking, "which will extend Hostess' consumer reach in the in-store bakery market and expand offerings to customers."