Four years after bankruptcy, Hostess Brands LLC, the Twinkies and Ding Dongs makerwhich was founded in 1919, announced on Tuesday that it would go public again with an enterprise value of about $2.3 billion in the third quarter.
According to a statement of Hostess, Gores Holdings Inc., which is sponsored by an affiliate of the Gores Group LLC, will contribute $375 million in cash. Other investors, including Gores Group Chief Executive Alec Gores, Hostess’s current owners, billionaire investor C. Dean Metropoulos, and others will invest $350 million to the deal.
After the deal, the current owner, Apollo Global Management LLC and Mr. Metropoulos and his family, will hold nearly 42% of Gores Holdings. In addition, company’s current management will remain in their place, Dean Metropoulos will still be the executive chairman and William Toler will be Chief Executive.
The company also said on Tuesday that it had revenue of $650 million for the year ended May 31, and the EBITDA of 2016 is expected to be $220 million.
“Hostess presents a unique opportunity to invest in an iconic brand with strong fundamentals that is poised for continued growth. We look forward to working with the team at Hostess as we collaborate to further capitalize on these attractive growth prospects.” Alec Gores said.
However, Hostess, the maker of many well-known snacks, almost collapsed in 2012.
The company was in Chapter 11 bankruptcy protection and shut down after 18,500 employees losing their jobs. After the bankruptcy, the company’s Wonder Bread brand was sold to Flowers Foods and its Twinkies, Ding Dongs, and Cupcake brands was sold to the current owners. Hostess’s snake cakes were kept under the new owners, and Twinkie snack cakes was back to stores in July 2013. The new owners made several changes to Hostess, such as creating new distribution systems by sending products directly to warehouses, and reducing manufacture to three plants.
After four years, Hostess emerged from bankruptcy and planned to go public again.
“We are extremely proud of all that we have accomplished together since we acquired these assets out of liquidation in 2013 and rebuilt the company into the great platform business it is today,” Andy Jhawar, the senior partner and head of the consumer and retail group at Apollo Global Management LLC, said.