Twinkies maker Hostess to go public after sale

Twinkies maker Hostess to go public after sale
UPI

LOS ANGELES, July 5 (UPI) — Hostess Brands LLC, the maker of Twinkies and other snack cakes, announced Tuesday it has reached an agreement to go public in an acquisition by Gores Holdings, Inc.

The company is valued at $2.3 billion, two years after it emerged from bankruptcy.

Gores Holdings Inc., a special-purpose acquisition company sponsored by a Gores Group LLC affiliate and traded on Nasdaq, will put up $375 million in cash raised through an IPO in August. Also, an additional $350 million is committed by Gores Group Chief Executive Alec Gores, current Hostess Executive Chairman Dean Metropoulos and other Gores affiliates.

Metropoulos and Chief Executive Officer William Toler will continue to lead the company.

The current owners, funds managed by affiliates of Apollo Global Management, LLC and Metropoulos and family, expect to hold an approximately 42 percent combined stake in Gores Holdings upon completion of the transaction.

Apollo bought Hostess out of liquidation in 2013 for about $410 million.

Hostess Brands produces CupCakes, Ding Dongs, Ho Hos, Donettes and Fruit Pies besides the iconic Twinkies. It also includes the Dolly Madison brand that include Zingers.

Hostess had revenues for the 12 months ended May 31 of approximately $650 million and operates three baking facilities located in Emporia, Kan., Indianapolis and Columbus, Ga. Before filing for bankruptcy three years ago, the company had more bakeries.

In June, Hostess acquired Massachusetts-based Superior Cake Products, whose products are sold under the name Superior on Main.

Hostess was founded in 1919 with the introduction of the Hostess CupCake. Twinkies were invented in 1930 by Jimmy Dewer.

Flowers Foods Inc. and other buyers purchased the Hostess bread brands, which included Wonder Bread and Nature’s Pride, but Hostess has since started making bread products under its own name.

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