Hostess Brands said it will sell Twinkies and other iconic snack cakes to private-equity firms Apollo Global Management LLC and C. Dean Metropoulos & Co. after no other bids were received, eliminating the need for an auction. Metropoulos CEO and founder Dean Metropoulos said in a statement regarding the Hostess deal that the firm was looking forward to having “America’s favorite snacks back on the shelf by this summer.”
Apparently the new buyers of Twinkies developed a sweet tooth for Hostess snack cakes.
Hostess Brands the now bankrupt owner of the cream-filled confections, agreed on Tuesday to sell the snacks — along with Ho Hos, Sno Balls and Dolly Madison Zingers — to two investment firms with a shared history of corporate turnarounds.
The wheels have been in motion to find a buyer for the company, which we recently named the number one food brand that refuses to die, and the joint team of Metropoulos & Co. and Apollo Global Management recently put in a $410 million bid for the company. The company will ask the U.S. Bankruptcy Court for the Southern District of New York to approve the transaction at a hearing on March 19.
A Hostess spokesman said the company had no comment on the lack of competing bids for Twinkies and the other Hostess cakes. Previously, Hostess CEO Greg Rayburn had predicted the competition for those cakes would be “wild and wooly.”
When Hostess, unable to reach a deal with its bakers’ union, announced in November that it would wind down operations, it set off waves of nostalgia for a symbol of American junk food. As recently as Tuesday, sellers on eBay were seeking to fetch as much as $250,000 for two boxes of Twinkies.
The sale will mean that Twinkies, born more than 83 years ago in an Illinois industrial kitchen, will live on, having survived wars, recessions and the South Beach and Dukan diets.
The deal includes five Hostess factories, which the buyers hope to restart so to begin restocking shore shelves by the summer. And the new company will almost certainly feature the Hostess name.
“There’s a great consumer fan base that hasn’t declined,” Daren Metropoulos, one of Mr. Metropoulos’ sons and an executive at the family firm, said in an interview. “We saw a real opportunity to revitalize these brands, just with some T.L.C.”
Hostess, based in Irving, Tex., stopped making its cakes and breads in late November after it announced it was going out of business and closing its plants following years of financial struggles.
“We look forward to discussing opportunities for our members with new ownership, and add value to the revival of these products,” David Durkee, the president of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, said in a statement.
Hostess is still selling its other remaining brands, including Drake’s snack cakes. Those auctions are expected to conclude by early next month.
Mr. Rayburn said that at some point, Hostess executives will celebrate by popping open a bottle of Champagne.
For his part, Daren Metropoulos said that he and his family would sample some new batches of Hostess product — “and probably crack open a cold P.B.R.”
The matter should be resolved once and for all in bankruptcy court on March 19, and soon afterward we can expect to begin seeing those gleaming little snack cakes on grocery store shelves once again.