It was only four years ago that sweet treat connoisseurs were bemoaning the loss of the Twinkie. Now Twinkie’s maker, Hostess Brands LLC, is going public.
The organization will sell a majority stake to Gores Holdings for $725 million, making its initial stock offering valued at around $2.3 billion.
That’s a stark contrast from 2012 when the company entered Chapter 11 bankruptcy and booted 18,500 of its employees.
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In a statement, Hostess executive chairman, C. Dean Metropoulos said:
This new phase in Hostess’s 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.
Investment firms Metropoulos & Co. and Apollo Global Management purchased Hostess’s snack brands through liquidation in 2013 for $185 million in cash. They borrowed another $500 million to purchase its assets (factories, recipes and equipment).
In terms of branding, Hostess was practically rebuilt from the ground up, creating a leaner and more efficient business. Before the takeover, Hostess employed 19,000 workers. Today, it has 1,200 employees.
From The New York Times:
Being acquired by a blank-check company will give Hostess a listing on the Nasdaq stock market, where Gores Holdings trades. That would give Hostess the ability to raise capital from the stock markets to pay for acquisitions or pay down some of its debt.
Gores Group’s Alec Gores calls the public offering unique for such an iconic brand:
Hostess presents a unique opportunity to invest in an iconic brand with strong fundamentals that is poised for continued growth.
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