Twinkies maker Hostess Brands to go public
Hostess Brands, the maker of Twinkies, Ho Hos and CupCakes, is to go public again after agreeing a $725 million deal with an affiliate of private equity firm The Gores Group.
The packaged food company, whose assets were bought out of liquidation in 2013, said Gores Holdings will acquire a majority stake in the business and take it public. The Gores Group will provide $375m through a trust account, while additional investors have committed $350m via a private placement, led by Alec Gores, chairman and CEO of The Gores Group.
Hostess Brands will have an anticipated initial enterprise value of around $2.3bn or 10.4x the group’s estimated 2016 adjusted EBITDA of $220m. For the 12 months to 31 May, its revenues reached $650m.
Upon completion, current owners Apollo Global Management and investor Dean Metropoulos will own a 42% in the company, which will be renamed Hostess Brands Inc.
Metropoulos and William Toler will continue to lead the company as executive chairman and CEO respectively.
The group said the transaction, which is expected to close in the third quarter of 2016, better enables Hostess to continue executing on its long-term growth plan by providing greater access to capital to fund future innovation and acquisitions.
“This new phase in Hostess’ evolution and partnership with The Gores Group and our broader investor partners will continue to propel Hostess into a growing and innovative company with significant reach and potential long into the future,” said Metropoulos.
Gores added, “Hostess presents a unique opportunity to invest in an iconic brand with strong fundamentals that is poised for continued growth. We look forward to working with the team at Hostess as we collaborate to further capitalise on these attractive growth prospects.”