- The private-equity owners of Hostess Brands LLC are planning to put the maker of Twinkies and other snack cakes up for sale in early 2015, potentially valuing it at more than $1.7 billion, including debt, people familiar with the matter told Reuters.
Apollo Global Management LLC and C. Dean Metropoulos & Co., which bought Hostess Brands out of bankruptcy for $410 million in March 2013, have received inquiries from some potential buyers about selling the cake business, the people said.
Hostess Brands is also having conversations with investment banks Rothschild, Credit Suisse Group AG and Perella Weinberg Partners about advisory roles they are likely to have in a potential sale, the people said.
The sources asked not to be identified because the discussions are private. Apollo, Credit Suisse and Rothschild declined to comment, while Metropoulos, Hostess Brands and Perella Weinberg did not immediately respond to requests by the news agency for comment.
Deliberations over a potential sale, first reported by The New York Post on November 11, follow a remarkable turnaround in the past year and a half spearheaded by Apollo and Metropoulos, a consumer industry veteran.
Apparently I was wrong about these guys running Hostess. History is going to record this as a win. They did it by
1) Putting in some new machines (though in limited numbers) to drive up production while cutting labor, Where as Hostess used I think it was 16 plants to produce cakes new owners started with 4 and now have 3.
2) letting stuff sit on the shelf for longer because they dont care about quality
3) Massively cutting labor costs by getting rid of union rules, paying people a lot less, and stocking shelves from central distribution centers rather than route salesmen. The getting rid of salesman/shelf stockers was huge.
4) Shrinking portions I think, though I dont eat the stuff
5) cutting products
I still think that the game plan to produce very low quality very high sugar and highly preserved cakes and treats is a plan for theath, but current owners might have been able to by these brands off the scrap heap, apply cost cutting, and then sell it at a great profit. There is some money to be made in selling crap to Americans.