KANSAS CITY, Mo., April 9, 2013 /PRNewswire/ -- Hostess Brands Inc. ("Hostess Brands" or "the Company") today announced that it has obtained U.S. Bankruptcy Court approval to sell its Drake's® snack cake brand as well as four of its northwest regional bread brands in two separate transactions totaling approximately $58.4 million in proceeds.
"The sale of Drake's® and the bread brands are the culmination of our efforts to sell the Company's major assets," said Gregory F. Rayburn, the Company's Chairman and Chief Executive Officer. "All of the Company's beloved brands can now live on and, importantly, we have maximized value for the Company's stakeholders. We now turn our attention to selling remaining miscellaneous assets and completing the liquidation."
Hostess Brands has now obtained Court approval of five transactions totaling approximately $860 million in proceeds.
U.S. Bankruptcy Judge Robert Drain today approved the following transactions:
Judge Drain previously approved the following transactions:
The Company has retained Hilco Industrial, LLC to market and sell its remaining assets, including property and equipment.
Jones Day provided legal advice to Hostess Brands on all of the transactions. Perella Weinberg Partners served as the Company's financial advisor.
]]>KANSAS CITY, Mo., March 12, 2013 - Hostess Brands Inc. ("Hostess Brands" or "the Company") announced that the stalking horse bid submitted by affiliates of Apollo Global Management, LLC (NYSE: APO) (collectively with its subsidiaries "Apollo") and Metropoulos & Co. ("Metropoulos") for the majority of the Company's snack cake business, which includes both Hostess® and Dolly Madison® branded products, will be the bid presented for approval to the U.S. Bankruptcy Court as no other qualified bids were received for those assets.
Apollo and Metropoulos have agreed to pay $410 million to purchase the brands, five bakeries and certain equipment. Among the products included are the Company's Twinkies®, Ho Hos®, Ding Dongs® and Donettes® snack cakes. 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.
"The agreement results in significant value for our stakeholders and we look forward to putting the proposed transaction before the Court next week," said Hostess Brands Chairman and Chief Executive Officer Gregory F. Rayburn.
As previously announced, Flowers Foods, Inc. has agreed to pay $360 million for the majority of the bread business assets. The agreement includes, in addition to the brands, 20 bakeries, 38 depots and other assets. In a separate transaction, Grupo Bimbo, S.A.B. de C.V. ("Grupo Bimbo") was selected as the winning bidder for the assets related to the Company's Beefsteak® bread business at the conclusion of a Feb. 28 auction. Grupo Bimbo has agreed to pay $31.9 million for the Beefsteak® assets. The Court will also consider approval of these brands at the same March 19 hearing for the Hostess® and Dolly Madison® brands.
On March 15 Hostess Brands will conduct an auction for its Drake's® snack cake business and Sweetheart®, Standish Farms®, Grandma Emilie's® and Eddy's® bread businesses. The combined stalking horse bids for those assets total approximately $56.6 million.
Jones Day provided legal advice to Hostess Brands on all of the transactions. Perella Weinberg Partners served as the Company's financial advisor.
]]>KANSAS CITY, Mo., Feb. 28, 2013 - Hostess Brands Inc. ("Hostess Brands" or the "Company") today announced that the stalking horse bid submitted by Flowers Foods, Inc. (Flowers) for the majority of the assets related to the Company's bread business, including the Butternut®, Home Pride®, Merita®, Nature's Pride® and Wonder® brands, will be the bid presented for approval to the U.S. Bankruptcy Court as no other qualified bids were received for those assets.
Flowers has agreed to pay $360 million for the majority of the bread business assets. The agreement includes, in addition to the brands, 20 bakeries, 38 depots and other assets. In a separate transaction, Grupo Bimbo, S.A.B. de C.V. was selected as the winning bidder for the assets related to the Company's Beefsteak® bread business at the conclusion of today's auction. Grupo Bimbo has agreed to pay $31.9 million for the Beefsteak® assets.
The Company will ask the U.S. Bankruptcy Court for the Southern District of New York to approve both transactions at a hearing on March 19.
"The proposed sales will result in significant proceeds for the benefit of the Company's stakeholders and ensure the beloved bread brands can continue to be enjoyed for years to come," said Hostess Brands Chairman and Chief Executive Officer Gregory F. Rayburn.
As previously announced, Hostess Brands is also pursuing the sale of its remaining brands, including Hostess®, Dolly Madison®, Drake's®, Sweetheart®, Eddy's®, Standish Farms® and Grandma Emilie's®.
Jones Day provided legal advice to Hostess Brands on the transaction. Perella Weinberg Partners served as the Company's financial advisor.
]]>KANSAS CITY, Mo., Jan. 30, 2013 - Hostess Brands Inc. ("Hostess Brands" or the "Company") today announced that the Company has selected affiliates of Apollo Global Management, LLC (NYSE: APO) (collectively with its subsidiaries "Apollo") and Metropoulos & Co. ("Metropoulos") as the stalking horse bidder for the majority of the assets of the Company's snack cake business, which includes both Hostess® and Dolly Madison® branded products, including the iconic Twinkies® brand. Apollo and Metropoulos have agreed to pay $410 million to purchase the brands, 5 bakeries and certain equipment.
"We are pleased to name Apollo and Metropoulos as the stalking horse bidder for these valuable and beloved brands," said Hostess Brands Chairman and Chief Executive Officer Gregory F. Rayburn. "Interest in these iconic brands has been intense and competitive and we expect that to continue through a robust, court-authorized auction process. The ultimate goal will be the same we have had since we began marketing all of our assets – to maximize value for all of the Company's stakeholders and ensure these great products can be enjoyed by their loyal fans for many years to come."
Hostess Brands has requested that the U.S. Bankruptcy Court for the Southern District of New York (the "Court") authorize the Company to proceed with an auction for the majority of the assets of the snack cake business on March 13, provided the Company receives competing qualified bids. The Company will select the highest and best offer at the conclusion of the auction. The sale to the winning bidder requires Court approval.
As previously announced, Hostess Brands has reached stalking horse agreements, contemplating an aggregate purchase price of more than $440 million, to sell the majority of the assets related to its bread business, including its Wonder®, Butternut®, Home Pride®, Merita®, Nature's Pride®, Beefsteak®, Sweetheart®, Eddy's®, Standish Farms® and Grandma Emilie's® bread brands as well as its Drake's® snack cake business.
The Company will select the winning bidders for the assets of the bread and snack cake businesses at the conclusion of various auctions. Sales to the winning bidders require Court approval.
"The stalking horse bids have set a floor of more than $850 million for the bulk of the Company's assets," Mr. Rayburn said. "We look forward to competitive auctions to further drive value for all of the Company's stakeholders."
Jones Day provided legal advice to Hostess Brands on the transaction. Perella Weinberg Partners served as the Company's financial advisor.
]]>KANSAS CITY, Mo., Jan. 28, 2013 - Hostess Brands Inc. today announced that the Company has selected two stalking horse bidders for its Drake's® snack cake brand and for its Sweetheart®, Eddy's®, Standish Farms®, and Grandma Emilie's® bread brands.
The combined purchase price under the two stalking horse bids is approximately $56.35 million.
Under the first stalking horse agreement, McKee Foods Corporation has agreed to pay $27.5 million for the Drake's® brand and certain equipment. Drake's® products include Ring Dings, Yodels, Devil Dogs, Yankee Doodles, Sunny Doodles, and Drake's Coffee Cake.
Under the second stalking horse agreement, United States Bakery, Inc. has agreed to pay $28.85 million for the Sweetheart®, Eddy's®, Standish Farms®, and Grandma Emilie's® bread brands, four bakeries, and 14 depots, plus certain equipment.
"These agreements once again set a strong value for our businesses and we look forward to conducting an auction process that will further enhance the return for Hostess's stakeholders," said Hostess Brands Chairman and Chief Executive Officer Gregory F. Rayburn. "The contemplated purchase prices for Drake's® and the four bread brands, together with our previous announced stalking horse bid for the majority of our bread business, means we have agreements to sell these assets for at least $440 million.
"We expect that figure to significantly increase once we announce a stalking horse bidder for the majority of our snack cake business, including Twinkies."
The Hostess snack cake business and the remaining bread business are contemplated to be sold in separate transactions.
As previously announced, Flowers Foods, Inc. was selected as the stalking horse bidder for the majority of the assets related to Hostess's bread business, including the Butternut®, Home Pride®, Merita®, Nature's Pride®, and Wonder® brands.
That agreement includes, in addition to the brands, 20 bakeries, 38 depots and other assets. The purchase price consists of $355 million in cash which will be increased to $360 million if certain license rights are included in the sale.
Hostess has also selected Flowers as the stalking horse bidder for the Company's Beefsteak® bread brand. The purchase price consists of $30 million in cash for the brand. The transaction does not include facilities or additional assets.
The Company will hold an auction for the majority of the bread business on February 28, provided the Company receives additional qualified bids, at the conclusion of which it will select the highest and best bidders.
Hostess has requested that the U.S. Bankruptcy Court for the Southern District of New York authorize the Company to proceed with a second auction for the Drake's® brand and the four bread brands on March 15.
All of the asset sales are subject to Court approval.
Jones Day provided legal advice to Hostess on the transaction.
]]>KANSAS CITY, Mo., January 11, 2013 - Hostess Brands Inc. today announced that the Company has selected Flowers Foods, Inc. as the stalking horse bidder for the majority of the assets related to the Company's bread business, including the Butternut®, Home Pride®, Merita®, Nature's Pride® and Wonder® brands.
The agreement includes, in addition to the brands, 20 bakeries, 38 depots and other assets. The purchase price consists of $355 million in cash (increased to $360 million if certain license rights are included in the sale). The Company's remaining bread brands, as well as its snack cake business, will be sold separately.
Hostess has also selected Flowers as the stalking horse bidder for the Company's Beefsteak® bread brand. The purchase price consists of $30 million in cash for the brand. The transaction does not include facilities or additional assets.
Hostess has requested that the U.S. Bankruptcy Court for the Southern District of New York authorize the Company to proceed with an auction with the two Flowers proposals as the stalking horse bids, provided the Company receives additional qualified bids. If approved, the stalking horse bids will serve as the opening bids in the auction. The final sales will be made to the highest and best bidders at the auction, subject to Court approval.
"We are pleased with the Flowers offers and look forward to a robust auction process that will allow these iconic brands to continue and to maximize value for all of the Company's stakeholders," said Hostess Chairman and Chief Executive Officer Gregory F. Rayburn. "We also continue to negotiate with parties interested in purchasing our snack cake business and remaining bread brands and expect to select additional stalking horse bidders as soon as reasonably practicable."
Hostess has asked the Court to order that the auction take place on February 28 and that a Court hearing to authorize the sale to the highest or otherwise best bidders commence on March 5. The schedule and the Flowers proposals are subject to Court approval. A hearing to consider approval of the bid procedures motions is scheduled for January 25.
Hostess selected the Flowers bids after Perella Weinberg Partners, Hostess's financial advisor, conducted a bidding process that involved contacting 169 potentially interested parties, 87 of which signed confidentially agreements.
Jones Day provided legal advice to Hostess on the transaction. Flowers was advised by Deutsche Bank and Kilpatrick Townsend.
]]>As Hostess has repeatedly disclosed, it suspended contributions to its multi-employer pension plans in August 2011 because it faced a severe liquidity crisis and could no longer afford to maintain its pension contributions.
Over the course of several decades, various labor bargaining units for Hostess Brands' employees negotiated the right to convert portions of their future wage increases to pension contributions. Once the bargaining units exercised these rights, such future amounts became permanent pension contributions that were separate and distinct from wages.
At no time were these pension contributions paid as wages, so no funds were ever "deducted from paychecks," as one news outlet erroneously reported. Hostess Brands has at all times continued to pay its union employees' current wages in full compliance with its collective bargaining agreements.
The pension plans may assert and have asserted claims in Hostess' bankruptcy cases for missed pre-petition and post-petition pension contributions.]]>
Judge Robert Drain approved the motion after the Company and the Bakery, Confectionary, Tobacco and Grain Millers Union (BCTGM) were unable to reach an agreement during an 11th-hour mediation yesterday.
Hostess Brands is winding down the Company after a nationwide strike initiated by the BCTGM that commenced on November 9th crippled its operations at a time when the Company lacked the financial resources to survive a significant labor action.
Among other provisions, the Court order allows Hostess Brands to return excess ingredients and packaging; provides liquidity through an amended debtor-in-possession financing agreement and consensual use of cash collateral; and authorizes the Company to implement a non-executive employee retention plan to ensure the Company has the necessary personnel to implement the wind down.
Hostess Brands said it intends to retain approximately 3,200 employees to assist with the initial phase of the wind down. Employee headcount is expected to decrease by 94% within the first 16 weeks of the wind down. The entire process is expected to be completed in one year.
The wind down was necessitated by an inflated cost structure that put the Company at a profound competitive disadvantage. The biggest component of the Company’s costs was its collective bargaining agreements that covered 15,000 of 18,500 employees.
Hostess Brands worked tirelessly to complete a reorganization of its business as a going concern, including spending the better part of 18 months negotiating with its key constituents to obtain a consensual agreement to lower costs to a sustainable level. The Company had obtained the support of its largest union, the International Brotherhood of Teamsters, and its lenders. However, the BCTGM leadership chose not to negotiate a new labor contract and instead, when presented with a final offer, launched a campaign to cripple the Company’s operations and force it to liquidate.
The wind down means the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes, 570 bakery outlet stores and the loss of 18,500 jobs.
Prospective bidders for the Company’s assets should contact the following representatives:
For employees whose jobs will be immediately eliminated, additional information can be found at this website, which also contains a copy of the Company’s wind down motion and information for customers and vendors.]]>
Today’s hearing to consider Hostess Brands’ motion to wind down the Company and sell all of its assets has been adjourned until 11 a.m., EST, on Wednesday.
Production remains shut down.]]>