Hostess Will Go Public Again
After seeking Chapter 11 bankruptcy protection for a second time in July 2012, Hostess Brands, LLC, the maker of Hostess Twinkies, Ding Dongs and CupCakes, will be a publicly traded company. It has entered into a definitive agreement with Gores Holdings, Inc., a special purpose acquisition company sponsored by an affiliate of The Gores Group, LLC.
This transaction will introduce Hostess as a publicly listed company, with an anticipated initial enterprise value of approximately $2.3 billion or 10.4x the Company’s estimated 2016 Adjusted EBITDA of approximately $220 million.
Dean Metropoulos and William Toler will continue to lead the company as executive chairman and CEO. The transaction provides Hostess greater access to capital to fund future innovation and acquisitions. The company says it will continue its organic growth through unique innovations and niche, strategic acquisitions, such as its recent acquisition of Superior Baking, which will extend Hostess' consumer reach in the ‘in-store bakery’ market and expand offerings to customers.
Along with the $375 million of cash held in Gores Holdings’ trust account, additional investors have committed to participate via $350 million private placement, led by Alec Gores, Chairman and CEO of The Gores Group, and comprising large institutional investors, C. Dean Metropoulos (via $50 million of additional rollover contribution), and Gores affiliates.
Funds managed by affiliates of Apollo Global Management, LLC and C. Dean Metropoulos and family, the current majority owners of Hostess, expect to hold an approximately 42 percent combined stake in Gores Holdings upon completion of the transaction.
The transaction has been unanimously approved by the boards of directors of both Gores Holdings and Hostess, and is expected to close in the third quarter of 2016, subject to the receipt of regulatory approval, and approval of the stockholders of Gores Holdings. Upon closing of the transaction, the name of the company will be changed to Hostess Brands, Inc.
Hostess was founded in 1919 with the introduction of the Hostess CupCake to the American public. In 1930, Twinkies were introduced and today, Hostess Brands produces a variety of new and classic treats including Ding Dongs, Ho Hos, Donettes and Fruit Pies. Hostess had revenues for the twelve months ended May 31, 2016 of approximately $650 million and operates three baking facilities located in Emporia, KS, Indianapolis, IN and Columbus, GA.
Deutsche Bank Securities Inc. acted as lead capital markets advisor, along with Moelis & Company and Morgan Stanley, and financial advisor and Weil, Gotshal & Manges LLP acted as legal advisor to Gores Holdings. Rothschild & Co., Credit Suisse and Perella Weinberg Partners acted as M&A advisors to Hostess. Morgan, Lewis & Bockius acted as legal advisor to Apollo. Paul, Weiss, Rifkind, Wharton & Garrison acted as legal advisor and UBS acted as financial advisor to C. Dean Metropoulos and his family.
This transaction will introduce Hostess as a publicly listed company, with an anticipated initial enterprise value of approximately $2.3 billion or 10.4x the Company’s estimated 2016 Adjusted EBITDA of approximately $220 million.
Dean Metropoulos and William Toler will continue to lead the company as executive chairman and CEO. The transaction provides Hostess greater access to capital to fund future innovation and acquisitions. The company says it will continue its organic growth through unique innovations and niche, strategic acquisitions, such as its recent acquisition of Superior Baking, which will extend Hostess' consumer reach in the ‘in-store bakery’ market and expand offerings to customers.
Along with the $375 million of cash held in Gores Holdings’ trust account, additional investors have committed to participate via $350 million private placement, led by Alec Gores, Chairman and CEO of The Gores Group, and comprising large institutional investors, C. Dean Metropoulos (via $50 million of additional rollover contribution), and Gores affiliates.
Funds managed by affiliates of Apollo Global Management, LLC and C. Dean Metropoulos and family, the current majority owners of Hostess, expect to hold an approximately 42 percent combined stake in Gores Holdings upon completion of the transaction.
The transaction has been unanimously approved by the boards of directors of both Gores Holdings and Hostess, and is expected to close in the third quarter of 2016, subject to the receipt of regulatory approval, and approval of the stockholders of Gores Holdings. Upon closing of the transaction, the name of the company will be changed to Hostess Brands, Inc.
Hostess was founded in 1919 with the introduction of the Hostess CupCake to the American public. In 1930, Twinkies were introduced and today, Hostess Brands produces a variety of new and classic treats including Ding Dongs, Ho Hos, Donettes and Fruit Pies. Hostess had revenues for the twelve months ended May 31, 2016 of approximately $650 million and operates three baking facilities located in Emporia, KS, Indianapolis, IN and Columbus, GA.
Deutsche Bank Securities Inc. acted as lead capital markets advisor, along with Moelis & Company and Morgan Stanley, and financial advisor and Weil, Gotshal & Manges LLP acted as legal advisor to Gores Holdings. Rothschild & Co., Credit Suisse and Perella Weinberg Partners acted as M&A advisors to Hostess. Morgan, Lewis & Bockius acted as legal advisor to Apollo. Paul, Weiss, Rifkind, Wharton & Garrison acted as legal advisor and UBS acted as financial advisor to C. Dean Metropoulos and his family.