Apollo, Metropoulos in Twinkies Deal
Sign stalking-horse agreement to acquire certain Hostess snack brands, bakeries
Published in CSP Daily News
NEW YORK & GREENWICH, Conn. -- Affiliates of Apollo Global Management LLC and Metropoulos & Co. have entered into a "stalking-horse" asset purchase agreement to acquire certain assets of Hostess Brands Inc.'s baked snack foods business for $410 million in cash. The brands include Twinkies, Mini Muffins, Cup Cakes, Ho Hos, Zingers and Suzy Q's.
The deal also includes five Hostess Snacks bakeries located throughout the United States.
The agreement provides for the acquisition of the snack assets of Hostess free and clear and does not require Apollo and Metropoulos to assume any of Hostess Snacks' liabilities or other obligations.
Hostess Brands Inc., Irving, Texas, announced in November that it was shutting down its business and selling its breads and snack cakes. The company's demise came after years of management turmoil and turnover, with workers saying the company failed to invest its brands. Hostess filed for its second Chapter 11 bankruptcy in less than a decade this January, citing costs associated with its unionized workforce ( click here for previous CSP Daily News coverage.)
The agreement constitutes a stalking-horse bid in a sale process being conducted under Chapter 11 of the U.S. Bankruptcy Code. As such, the acquisition remains subject to approval by the U.S. Bankruptcy Court for the Southern District of New York and a subsequent auction process in which other interested buyers may submit competing bids. Completion of the transaction, expected to occur prior to the end of April, remains subject to competing offers, approval by the bankruptcy court and customary closing conditions.
"We are pleased to be partnered with Apollo as we seek to resurrect Hostess Snacks and return these legendary products to the American consumer," said C. Dean Metropoulos, founder and CEO of Metropoulos & Co.
"For more than 25 years, we have had the opportunity to acquire and grow some of the world's most widely recognized consumer food and beverage brands, and I look forward to working with Apollo in rebuilding these heritage brands and ensuring their long term availability to their loyal consumers. Never before have we seen such a groundswell of support and desire for a brand's return and revival," he said.
Andy Jhawar, a senior partner of Apollo and head of its Consumer & Food Retail Industry Group, said, "Today's approval of the stalking-horse agreement is a positive step toward saving some of America's most well-recognized and iconic brands. We believe the Hostess Snacks brands we agreed to acquire offer significant potential for renewed growth and expansion into additional channels of distribution. We are confident that the combined expertise and capital of Apollo and C. Dean Metropoulos, who has an unparalleled track record of value creation in the consumer packaged food and beverage industry, will prove invaluable as we re-launch the Hostess Snacks business."
New York City-based Apollo is a leading global alternative investment manager with assets under management of approximately $110 billion as of Sept. 30, 2012, in private equity, credit and real-estate funds invested across a core group of nine industries where Apollo has considerable knowledge and resources.
Greenwich, Conn.-based Metropoulos & Co. is a merchant banking and management firm focused principally on the food and consumer sectors in the United States and Europe. In recent years, C. Dean Metropoulos and his management team partners have been involved in more than 74 acquisitions with more than $12 billion of aggregate transaction value. Companies where Metropoulos & Co. has been an investor and Metropoulos has been an executive include Pabst Brewing Co., Pinnacle Foods, Aurora Foods, Stella Foods, The Morningstar Group, International Home Foods, Ghirardelli Chocolates, Mumm and Perrier Jouet Champagnes and Hillsdown Holdings PLC (Premier International Foods, Burtons Biscuits and Christie Tyler Furniture) among others.