Last updated on August 30th, 2022 at 03:39 pm
Flowers Foods Inc. has signed two asset purchase agreements with Hostess Brands Inc. as the “stalking horse bidder” for certain Hostess assets. The announcement was made Jan. 11. One of the agreements provides for the purchase by Flowers of the Wonder, Nature’s Pride, Merita, Home Pride and Butternut bread brands; 20 bakeries; and approximately 38 depots for a purchase price of $360 million. The other agreement provides for the purchase by Flowers of the Beefsteak brand for $30 million.
“This agreement is consistent with Flowers Foods’ long-term growth objectives to reach significantly more of the U.S. population with its fresh breads, buns and rolls,” said George E. Deese, chairman and CEO of Thomasville, Ga.-based Flowers Foods. “We believe these assets would enhance our ability, over time, to provide more U.S. consumers with quality baked foods at a good value through existing and new retail and foodservice customers.”
The transactions are subject to a court-approved bankruptcy process being initiated by Hostess. If Flowers’ “stalking horse” bids are approved by the bankruptcy court, the bids would then be subject to a competitive auction process to be held several weeks. The company would expect to close the transactions shortly following court approval if it is selected as the winning bidder. The transactions also are subject to regulatory clearance.
Flowers Foods had previously stated its interest in acquiring certain Hostess assets should they become available.
Based on the current bid price, Flowers Foods would expect the transactions to be accretive to earnings in 2013. Flowers Foods plans to finance the transactions through a mix of available cash on hand and debt.
Flowers Foods is the second-largest producer and marketer of packaged bakery foods for retail and foodservice customers in the U.S. with annual sales of more than $3 billion. The company operates 44 bakeries that produce a range of bakery products. These products currently are sold through a direct-store-delivery network with access to more than 70 percent of the U.S. population in the East, South, and Southwest as well as in certain markets in California. Select Flowers products are sold nationwide through customers’ delivery systems. Among the company’s top brands are Nature’s Own and Tastykake.