KANSAS CITY, Mo. -- Hostess Brands Inc. has announced that the stalking horse bid submitted by affiliates of Apollo Global Management LLC and Metropoulos & Co. for the majority of the Company's snack cake business, which includes both Hostess and Dolly Madison branded products, will be the bid presented for approval to the U.S. Bankruptcy Court as no other qualified bids were received for those assets.
Apollo and Metropoulos have agreed to pay $410 million to purchase the brands, five bakeries and certain equipment. Among the products included are the company's Twinkies, Ho Hos, Ding Dongs and Donettes snack cakes. The company will ask the U.S. Bankruptcy Court for the Southern District of New York to approve the transaction at a hearing on March 19.
Hostess Brands Inc., Irving, Texas, announced in November that it was shutting down its business and selling its breads and snack cakes. The company's demise came after years of management turmoil and turnover, with workers saying the company failed to invest its brands. Hostess filed for its second Chapter 11 bankruptcy in less than a decade this January, citing costs associated with its unionized workforce "The agreement results in significant value for our stakeholders and we look forward to putting the proposed transaction before the Court next week," said Hostess Brands chairman and CEO Gregory F. Rayburn.
In a statement provided to CSP Daily News, Dean Metropoulos said, "We are very pleased to have been named the buyer of the Hostess snack business with our partner Apollo Global Management. Our family is thrilled to have the opportunity to reestablish these iconic brands with new creative marketing ideas and renewed sales efforts and investment. We look forward to having America's favorite snacks back on the shelf by this summer. We are also ecstatic to bring jobs back to many cities across the country."
As previously announced, Flowers Foods Inc. has agreed to pay $360 million for the majority of the bread business assets. The agreement includes, in addition to the brands, 20 bakeries, 38 depots and other assets. In a separate transaction, Grupo Bimbo SAB de CV was selected as the winning bidder for the assets related to the company's Beefsteak bread business at the conclusion of a Feb. 28 auction. Grupo Bimbo has agreed to pay $31.9 million for the Beefsteak assets.
The court will also consider approval of these brands at the same March 19 hearing for the Hostess and Dolly Madison brands.
On March 15 Hostess Brands will conduct an auction for its Drake's snack cake business and Sweetheart, Standish Farms, Grandma Emilie's and Eddy's bread businesses. The combined stalking horse bids for those assets total approximately $56.6 million.
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