Hostess Twinkies owner enters sales deal with Los Angeles firm

The baker of Twinkies, Ding Dongs, Zingers and other snake cake products — which has a plant on Victory Drive in Columbus — is headed toward a partial sale to a publicly traded company.

Privately owned Kansas City, Mo.-based Hostess Brands LLC said Tuesday it plans to sell the company to a holding company set up by Los Angeles-based The Gores Group, an asset management firm that owns businesses in several industries. Gores Holdings Inc. has three publicly traded listings on the NASDAQ stock exchange — GRSHU, GRSH and GRSHW.

Dean Metropoulos, current co-owner of Hostess Brands, said in a statement that he and Apollo Global Management, which bought the bankrupt snack product manufacturer three years ago, are pleased to see the “next stage of Hostess’ growth and expansion” on the horizon. C. Dean Metropoulos and Apollo will have ownership of about 42 percent in the bakery business after the sale is completed. Metropoulos will remain executive chairman while William Toler will keep his job of chief executive officer.

“We look forward to continuing both our strong organic (existing customer) growth through unique innovations and niche, strategic acquisitions, such as our recent acquisition of Superior Baking, which will extend Hostess’ consumer reach in the ‘in-store bakery’ market and expand offerings to customers,” Metropoulos said.

Upon completion of the deal, which is expected later this year, Hostess will become a publicly listed company with an initial enterprise value of about $2.3 billion. The snack company had revenues of about $650 million in the 12 months ending May 31, with its three production facilities in Columbus, Emporia, Kan., and Indianapolis. The bankrupt Hostess operated nearly a dozen plants at one point.

The Columbus bakery at 1969 Victory Drive closed amid the bankruptcy, but was one of a handful of facilities reopened after the 2013 purchase by Hostess Brands LLC. Some were eventually closed. The company has not disclosed the employee count at the Columbus bakery, although as it was reopening three years ago, the owner said it hoped to eventually have the workforce up to 300. It was recruiting for about 40 employees as recently as May.

The Columbus plant opened in 1971 and employed as many as 1,200 people about 15 years ago. But staffing had fallen to around 420 heading into the bankruptcy in 2013. Hostess itself dates to the 1919 debut of its cupcake, with Twinkies coming to the market in 1930.

The current purchase includes $375 million being placed in the Gores Holdings trust account, with several more investors — including Gores Group Chairman and CEO Alec Gores — contributing $350 million to other accounts.

“Hostess presents a unique opportunity to invest in an iconic brand with strong fundamentals that is poised for continued growth,” Gores said in a statement. “We look forward to working with the team at Hostess as we collaborate to further capitalize on these attractive growth prospects.”

This story was originally published July 5, 2016 at 3:58 PM with the headline "Hostess Twinkies owner enters sales deal with Los Angeles firm."