Hostess Brands to be publicly traded in deal with Alec Gores

THREE YEARS AFTER being bought out of bankruptcy, Hostess Brands, maker of Twinkies, Ding Dongs and other snacks, is getting ready to become a publicly traded company again. / BLOOMBERG NEWS PHOTO/DANIEL ACKER
THREE YEARS AFTER being bought out of bankruptcy, Hostess Brands, maker of Twinkies, Ding Dongs and other snacks, is getting ready to become a publicly traded company again. / BLOOMBERG NEWS PHOTO/DANIEL ACKER

GENEVA – Hostess Brands LLC, the iconic American baker of Twinkies and Ding Dongs, plans to become a publicly listed company three years after being bought out of liquidation.

An acquisition vehicle linked to Gores Group LLC will provide $375 million to the deal, and additional investors have committed $350 million in a private placement, the companies said in a statement Tuesday. Hostess’s current owners – private equity firm Apollo Global Management LLC and investor Dean Metropoulos – will hold a 42 percent combined stake in the vehicle, which will be renamed Hostess Brands Inc.

The deal marks a comeback for a brand that was close to extinction before Apollo and Metropoulos bought Hostess out of bankruptcy in 2013. After the deal announced Tuesday is completed, which is expected in the third quarter, Metropoulos will continue to serve as executive chairman and William Toler will remain CEO.

“Hostess presents a unique opportunity to invest in an iconic brand with strong fundamentals that is poised for continued growth,” Alec Gores said in a statement.

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Gores said it expects the new company will have an initial enterprise value of about $2.3 billion, 10.4 times its forecast 2016 adjusted operating profit of about $220 million.

Hostess was founded in 1919 and introduced Twinkies in 1930. The company had about $650 million in revenue in the year ended May 31.

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