Wednesday, March 13, 2013

Billionaire Investors Gobble Up Twinkies: Hostess Snacks Sold For $410 Million

Box of Twinkies
Box of Twinkies (Photo credit: Wikipedia)
Hostess’s iconic sweets will soon return to grocery store shelves. The brands have been sold to a group of billionaire investors for $410 million.

Two private equity shops, Apollo Global Management and Metropoulos & Co., emerged as the victors. “We are very pleased to have the opportunity to bring back America’s favorite snack. Apollo and I are proud to be associated with an outstanding set of brands,” Dean Metropoulos, the eponymous company’s founder said in a statement.

Hostess was ready to auction off the brands, but the company notified bankruptcy court today that the Apollo-Metropoulos group was the only qualified bid. The bidders say they hope to have the products back in stores as soon as possible.

The private equity firms will control a portfolio of brands that include Ding Dongs, Twinkies and Ho-Ho cupcakes. Both companies are experienced with turnarounds–Metropoulos particularly so. It owns Pabst Blue Ribbon, and in the past controlled Chef Boyardee, Bumble Bee and PAM cooking spray.
The 18,500 workers who were employed by bankrupt Hostess have lost their jobs. Metropoulos and Apollo stressed that they will add jobs by buying the brands. Private equity firms, of course, have been vilified for cutting costs and jobs when they buy a company.

Forbes speculated the brands would follow to another billionaire-led company, the Mexico-based Grupo Bimbo. Other reports showed Kroger and Wal-Mart intersted in the goods..
Flowers Foods already publicly announced its purchase of Hostess’ bread brands.

Reach Abram Brown at abrown@forbes.com.

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