Hostess Brands obtained court approval on five transactions totalling around $860m. The last two were passed on April 10.
“Hostess did what they had to, and did it quickly. It’s only worthwhile if you can get products back on shelves quickly,” said Matthew Hudak, packaged food analyst for Euromonitor International.
“$860m is a little under on what they’d be worth, but this is to be expected with a bankruptcy like this…It’s probably the best deal they could have had, given the situation in terms of speed,” Hudak told BakeryandSnacks.com.
“It all happened very quickly … It was very easy for companies to buy up these assets – some didn’t even have a competing bid.”
The risk: Out of sight, out of mind
Hudak said it will be crucial for the new owners to get business fired up fast and products back on shelves – by early or late summer and the latest.
“It would be foolish not to. They [new owners] can’t risk products being out of sight, out of mind for too long – especially with the Twinkie that has a lot of competitors,” he said.
“Consumers will try other products if a brand isn’t there, and if they enjoy them, they will buy these instead. The new owners will have to pretty aggressively market the products once launched to get consumer attention again.”
He said the time of the shelf is probably longer than most of the buyers would have wanted. “There definitely has to be some loss considering the products were not on shelves. In this time, other companies had a chance to come in and sell alternatives.”
‘Beloved’ brands live on
Hostess chairman and CEO Gregory F. Rayburn said: “All of the company’s beloved brands can now live on and, importantly, we have maximized value for the company’s stakeholders.”
Rayburn said attention will now be on the final sale of remaining miscellaneous assets and completing the liquidation.
The sales round up
Apollo Global Management, LLC and Metropoulos & Co paid $410m for the majority of Hostess’ cake business – including Hostess and Dolly Madison brands. Products include Twinkies, Ho Hos, Ding Dongs and Donnettes.
Flowers Foods paid $360m for the majority of Hostess’ bread business – including Wonder Bread brand and five other brands.
Grupo Bimbo paid $31m for the Beefsteak bread brand.
McKee Foods Corporation paid $27.5m for the Drake’s snack cake brand. Products include Ring Dings, Yodels, Devil Dogs, Yankee Doodles, Sunny Doodles and Drake’s Coffee Cake.
United States Bakery paid $30.9m for four of Hostess’ bread brands – Sweetheart, Eddy’s, Standish Farms and Grandma Emilie’s.