Hostess Brands, Inc. Enters Into Definitive Agreement to Sell Superior Cake Products, Inc. to Sara Lee Frozen Bakery
August 01 2019 - 5:46PM
Business Wire
Hostess Brands, Inc. (“Hostess” or “Company”) (NASDAQ: TWNK)
(NASDAQ: TWNKW) today announced that it has entered into a
definitive agreement to sell its Superior Cake Products, Inc.
(“Superior”) in-store bakery business to Sara Lee Frozen Bakery for
a purchase price of $65 million in cash, subject to post-closing
adjustments. The transaction is expected to close during the third
quarter, subject to customary closing conditions. The Company
expects to use the net proceeds from the transaction to pursue a
range of potential strategic options, including reinvesting in its
business, de-leveraging its balance sheet and pursuing potential
strategic acquisitions, while effectively managing its capital
structure.
Andy Callahan, President and Chief Executive Officer of Hostess,
said, “Superior has been a high performing business and we believe
that it will continue to thrive in Sara Lee Frozen Bakery’s
portfolio as we focus our future investments on areas of our
business that better leverage our core competencies and pillars for
growth. I would like to thank the Superior team for their
contributions to the Company and wish them continued success as
they move forward under new ownership.”
Superior has been baking quality products for more than a
century, producing a range of sweet goods including Éclairs,
Madeleines, Brownie Bites®, Black and White Cookies and other
offerings made under the “Superior on Main®” brand name. In 2016,
Hostess acquired Superior for approximately $51 million and grew
the business from $33 million of net revenue and $5 million of
EBITDA for the twelve months prior to acquisition in May 2016, to
approximately $43 million of net revenue and $7 million of EBITDA
for the twelve months ended April 30, 2019.1
“We are thrilled to add Superior to our portfolio of established
and iconic brands,” said Craig Bahner, Chief Executive Officer of
Sara Lee Frozen Bakery. “This acquisition accelerates Sara Lee
Frozen Bakery’s strategic goal of expanding our presence in the
high-growth in-store bakery category. Along with our new colleagues
at Superior, we will continue to innovate and deliver irresistible
foods that meet retail customer and consumer demands for premium,
‘worth it’ indulgences.”
TM Capital acted as financial advisor to Hostess.
The Company expects to report its second quarter 2019 financial
results on August 7, 2019.
About Hostess Brands, Inc.
Hostess Brands, Inc. is a leading packaged food company focused
on developing, manufacturing, marketing, selling and distributing
fresh baked sweet goods in the United States. The brand's history
dates back to 1919, when the Hostess® CupCake was introduced to the
public, followed by Twinkies® in 1930. Today, in addition to
Twinkies® and CupCakes the Company produces a variety of new and
classic treats including Donettes®, Ding Dongs®, Zingers®,
Danishes, Honey Buns and Coffee Cakes.
About Sara Lee® Frozen Bakery:
Sara Lee Frozen Bakery is a leading maker of frozen bakery and
dessert products, headquartered in the Chicago suburb of Oakbrook
Terrace with bakeries in Michigan and North Carolina. The company’s
premier brands include Sara Lee®, Van’s™, Chef Pierre® and Bistro®
Collection. Each day, the company pursues its Vision of becoming
the world’s most beloved bakery by creating irresistible foods,
growing with our customers, and delivering value for all. For more
information, visit www.saraleefrozenbakery.com.
Reconciliation of Non-GAAP Financial
Measures
EBITDA is referred to as a “Non-GAAP Financial Measure” commonly
used in the Company’s industry and should not be construed as an
alternative to net income or as an indicator of operating
performance or as an alternative to cash provided by operating
activities as a measure of liquidity (each as determined in
accordance with GAAP). EBITDA may not be comparable to similarly
titled measures reported by other companies. The Company has
included EBITDA because it believes the measures provide management
and investors with additional information to measure the Company's
performance and liquidity, estimate the Company's value and
evaluate the Company's ability to service debt.
The Company defines EBITDA as net income adjusted to exclude (i)
interest expense, net, (ii) depreciation and amortization and (iii)
income taxes.
Twelve Months Ended
(in $ millions)
4/30/2016
4/30/2019
Net Income
$
3
$
1
Interest
-
2
Tax Provision
1
1
Depreciation & Amortization
1
3
EBITDA
$
5
$
7
Forward-Looking
Statements
Certain statements in this press release are forward-looking as
defined in Section 27A of the Securities Act of 1933, as amended
and Section 21E of the Securities Exchange Act of 1934, as amended.
Any statements contained herein that are not statements of
historical fact (including, but not limited to, statements to the
effect that Hostess Brands, Inc. or its management “anticipates,”
“plans,” “estimates,” “expects,” “believes,” or the negative of
these terms and other similar expressions) should be considered
forward-looking statements. These statements involve certain risks
and uncertainties that may cause actual results to differ
materially from expectations as of the date of this release. These
risks and uncertainties include, without limitation, factors set
forth from time to time in the Company's SEC filings. The Company
intends these forward-looking statements to speak only as of the
time of this release and does not undertake to update or revise
them as more information becomes available, except as required by
law.
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version on businesswire.com: https://www.businesswire.com/news/home/20190801006082/en/
Investor Contact: For Hostess inquiries: ICR Katie Turner
or Rachel Perkins 646-277-1228 or 646-277-1221
katie.turner@icrinc.com or rachel.perkins@icrinc.com
Media Contact: For Hostess inquiries: LAK Public
Relations, Inc. Hannah Arnold or Marie Espinel 212-329-1417 or
212-899-4744 harnold@lakpr.com or mespinel@lakpr.com
For Sara Lee Frozen Bakery inquiries: Natalie Boscia (773)
317-1088 natalie@nataliebpr.com
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