Flowers Foods, Inc. confirmed that its stalking horse bid for Hostess Brands, Inc.’s Wonder, Nature’s Pride, Merita, Home Pride, and Butternut bread brands; 20 bakeries; and approximately 38 depots for $360 million was declared the highest and best bid for such assets, eliminating the need for the auction that had been scheduled for February 28. This transaction now moves to the next phase, which is a review and approval of Flowers’ bid by the bankruptcy court overseeing Hostess’ bankruptcy case at a hearing scheduled for March 19, 2013.
Flowers’ stalking horse bid for Hostess’ Beefsteak brand for a purchase price of $30 million was topped by another bidder. That auction was scheduled for today, but Flowers chose not to increase its bid as would have been necessary to win the Beefsteak auction.
“We are pleased Flowers won the bid for Hostess’ primary bread brands and bakeries without the need for an auction,” George E. Deese, Flowers Foods’ chairman of the board and CEO said in a prepared statement. “Now we move forward with the next step, which is the bankruptcy court review. Following that, the transaction will continue through the regulatory process before it can be finalized. We expect it could be several months yet before it’s finalized.”
Following Hostess’ exit from the market in Nov. 2012 and the initiation of the sale of its assets, Flowers announced on Jan. 11, its agreement with Hostess to be the stalking horse bidder for certain Hostess bread bakeries and bread brands.
If Flowers is ultimately successful in its acquisition of these assets, they will fit with the company’s long-term growth objective to reach more of the U.S. population with its fresh breads, buns, and rolls.
“Since 2004, our company has expanded the reach of our fresh bakery products from about 38 percent of the U.S. population to more than 70 percent today,” Deese noted. “We accomplished this by expanding into new markets from our existing bakeries, building new bakeries, and through strategic acquisitions. We have proven experience in integrating acquisitions, having completed more than 100 since 1968 and three significant ones in just the last three years—Tasty Baking, Lepage Bakeries, and the Sara Lee and Earthgrains brands in California.”