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Flowers Foods obtains $300m loan to help finance acquisition of Hostess' bread business

By Elaine WATSON , 09-Apr-2013
Last updated on 09-Apr-2013 at 18:40 GMT

Flowers Foods has obtained a $300m loan to help finance its acquisition of Hostess Brands' bread business.

The 'delayed-draw' term loan was arranged with the help of Deutsche Bank AG and Bank of America Corp, said the Georgia-based baker, which has also amended its $500m revolving credit line and existing unsecured term debt to loosen leverage ratios and get "more favorable" covenants.

Flowers recently agreed to pay $360m for Hostess’s Wonder, Butternut, Home Pride, Merita and Nature’s Pride brands, 20 bread plants, 38 depots and other assets.

“The regulatory review of the proposed acquisition is underway,” R. Steve Kinsey, chief financial officer of Flowers, said in a statement.

“The new term loan balances near-term and longer-term debt, and will allow us to deliver in keeping with our long-term financial objectives.”

Bankruptcy judge Robert Drain has approved the sale of the majority of Hostess’ brands and assets to multiple bidders, including Mexico's Grupo Bimbo (which outbid Flowers Foods to secure the Beefsteak bread brand); United States Bakery (Sweetheart, Eddy’s, Standish Farms and Grandma Emilie’s); McKee Foods (Devil Dogs, Ring Dings, Yodels, Yankee Doodles, Sunny Doodles, Funny Bones and Drake’s Coffee Cake); and Apollo Global Management and C. Dean Metropoulos & Co. (Twinkies, Mini Muffins, Cup Cakes, Ho Hos, Zingers and Suzy Q’s).

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