Hostess Brand sold again to go public

05-Jul-2016 - Last updated on 07-Jul-2016 at 07:43 GMT

Hostess Brands has been sold to The Gores Group (Image taken from Flickr/Sharon)

Hostess Brands – the maker of snack cake Twinkies – has been sold to the private equity firm The Gores Group, with a view to making the company public later this year.

A deal was reached between Hostess’s owner, Apollo Global Management and Dean Metropoulos, and The Gores Group for the maker of Twinkies, and other snack cake brands Ding Dongs and Sno Balls. The Gores Group will pay £555M ($725M) for the Hostess brands.

The current owner of Hostess will also receive a 42% stake in The Gores Group.

A unique opportunity

Chairman and ceo of The Gores Group Alec Gores said: “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 capitalise on these attractive growth prospects.”

This will be the second time Hostess has been bought since the company escaped bankruptcy in 2013, when it was bought by Apollo and Metropoulos for £318M ($410M).

Head of the consumer and retail group at Apollo Andy Jhawar said: “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.”

Metropoulos added: “I have enjoyed working together with Apollo to build a vibrant and exciting company, and we are pleased to partner with the Gores Holdings team as we move to the next stage of Hostess’s growth and expansion.”

Available on the Nasdaq stock market

The deal is expected to be completed at the end of this year. Hostess will then be available on the Nasdaq stock market, where Gores Holdings trades.

The money generated from going public could be enough to pay down some of Hostess’s debts. The Gores Group confirmed Metropoulos and William Toler will continue their roles in the company as executive chairman and ceo, respectively.

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

The Gores Group recently sold Hay Group, the largest producer of forged and machine steel automative parts in Europe. A deal with Musashi Seimitsu was confirmed less than two months ago.

In January 2014, The Gores Group embarked on a £87.5M joint venture with UK-based Premier Foods to run the Hovis bread and flour business.