Milling & Baking News - April 2, 2013 - 13

Business



Key Hostess sales processes okayed,
ﬁnal approval hearings scheduled
KANSAS CITY — Hostess Brands,
Inc. said on March 20 that it has obtained bankruptcy court approval to
sell the majority of its snack cake business and the majority of its bread business in separate transactions totaling
about $800 million in proceeds.
“We embarked on the sales process
with one overarching goal — to maximize value for all of the company’s
stakeholders, and I am pleased to report that we have been successful,”
said Gregory F. Rayburn, chairman
and chief executive officer of Hostess,
Irving, Texas.
Hostess said Robert Drain, a
U.S. bankruptcy judge, approved the following
transactions:
• The acquisition by
affiliates of Apollo Global Management, L.L.C.
and Metropoulos & Co., which agreed
to pay $410 million for the assets of
the majority of the snack cake business. The sale price was the same as
the stalking horse bid announced Jan.
30. The assets include Hostess and
Dolly Madison branded products such
as Twinkies, Ho Hos, Ding Dongs and
Donettes as well as five bakeries and
certain equipment.
• The acquisition by Flowers Foods,
Inc., Thomasville, Ga., which agreed
to pay $360 million for the majority of
the bread business. The transaction includes brands such as Wonder, 20 bakeries, 38 depots and other assets. Under
a stalking horse bid announced Jan. 11,
Flowers would have paid $350 million
in cash (up to $360 million if certain license rights were included in the sale).
• The acquisition by affiliates of

Grupo Bimbo, S.A.B. de C.V., Mexico
City, which agreed to pay $31.9 million
for the Beefsteak bread brand. Flowers Foods originally was selected as a
stalking horse bidder for the Beefsteak
brand in a transaction that would have
carried a purchase price of $30 million.
The judge also approved the scheduling of final sales hearings in connections with the transactions.
The approval generated an optimistic response from the head of the Bakery, Confectionery, Tobacco and Grain
Millers International Union.
“Throughout this arduous process,
our membership has believed that the key to
these brands’ survival
was strong, new ownership and a sustainable business model,”
said David B. Durkee, president of the B.C.T.G.M. International.
“Indeed, new ownership has signaled
a clear intent to accelerate this process and return products back to the
shelves as soon as this summer.”
Hostess Brands on April 9 will seek
court approval for two more transactions. McKee Foods Corp., Collegedale,
Tenn., has offered to pay $27.5 million
for the Drake’s snack cake brand and
certain equipment. United States Bakery, Portland, Ore., has offered to pay
about $30.9 million for bread brands
in the Northwest such as Sweetheart,
Eddy’s, Standish Farms and Grandma
Emilie’s as well as 4 bakeries, 14 depots
and certain equipment.
Mr. Rayburn in late January said all
the stalking horse bids set a floor of
more than $850 million for the bulk of
the company’s assets. MBN

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Judge’s order explicit on union contracts
WHITE PLAINS, N.Y. — In an order
authorizing the sale of the largest
part of the Hostess snack cake business, a bankruptcy court judge said
the transaction will be “free and
clear, to the fullest extent available”
of all claims, including those in connection with labor agreements.
The listing of the various labor
claims was included in the order
signed March 19 by Judge Robert
D. Drain, U.S. Bankruptcy Court,
Southern District of New York.
In addition to debts and liens,
Judge Drain said the sale would be

free and clear of claims including
employee benefit plans, multiemployer plans and debtors’ collective
bargaining agreements.
The listing was included within
the 210-page order, approving the
sale to buyers affiliated with Apollo Global Management L.L.C. and
Metropoulos & Co. Judge Drain
said any remaining such claims will
be limited to the proceeds of the sale
by the Hostess debtors.
“Those holders of claims who
did not object (or who ultimately
withdrew their objections, if any) to

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Milling & Baking News April 2, 2013 / 13

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Milling & Baking News - April 2, 2013

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