Florida to Twinkies' Rescue? Sarasota and Boca Raton Companies to Make Bids to Acquire Hostess

Don't take out the funeral pals for Twinkies, Ding Dongs, and Ho Hos quite yet. The Sarasota Herald-Tribune reports a small company headquartered in the Sunshine State might be coming to the rescue:

"A local investment company said Monday it plans to make a multimillion bid for the Hostess bakery line, which includes iconic brands such as Wonder Bread and Twinkies snack food.

"But Hurst Capital LLLP acknowledges that winning what is likely to be a bidding war in federal bankruptcy court will be an uphill climb.

"'It's true, we don't have any experience in consumer brands,' Austin Hurst, Hurst Capital's managing general partner, said Monday. 'And this would be the biggest deal we've ever done.'

"In addition to what is expected to be intense competition from the likes of Flowers Foods Inc., Sara Lee Corp. and private equity firms for Hostess Brands Inc., Hurst Capital will be saddled with its own lack of big deal experience.

"The company, which is run by 26-year-old Austin Hurst and his twin brother, Zach, has never done an acquisition larger than about $1 million.

"Hostess, by comparison, could easily trade for 300 to 500 times that amount.

"Still, Austin Hurst describes Hostess as a 'compelling acquisition.'

"'I don't think the Hostess brands have lost their integrity,' he said. 'They're iconic brands. Wonder Bread is the No. 1 selling brand of white bread in the country. It's a win-win opportunity.'

"Hurst said he expects his company to be a 'contender' over the eight to 10 months that it takes for the U.S. Bankruptcy Court for the Southern District of New York to organize a sale.

"'I think we can pull this off,' he said.

"Hostess has begun shuttering its nearly three dozen plants nationwide last week after laying off nearly 19,000 stemming from what it called a 'labor strike' with several unions."

{Source: "Sarasota Company Hoping to Make Bid for Hostess"}

And Fortune magazine reports a Boca Raton company's also making a bid:

"Private equity firm Sun Capital Partners wants to buy bankrupt bakery Hostess Brands Inc., Fortune has learned.

"The proposal would be to operate Hostess as a going concern, including reopening the shuttered factories and continuing union representation of Hostess workers.

"Sun Capital privately expressed interest in acquiring Hostess earlier this year, but the bakery's creditors chose for an alternate reorganization plan that ultimately failed. Following Friday's liquidation, Sun re-engaged by contacting Hostess adviser Perella Weinberg Partners. It also plans to contact the relevant labor unions.

"'I think that we could offer a slightly better, more labor-friendly deal than what was on the table last week,' says Sun co-CEO Marc Leder, in an interview with Fortune. 'We also think that one point the unions have made is that there hasn't been a great amount of reinvestment in the business. We've found that investing new capital into companies like this can be very positive for brand, people and profitability ... We would look to invest in newer, more modern, manufacturing assets that would enable the company to become more productive and to innovate.'"


{Source: "Sun Capital Wants to Buy Hostess"}

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Comments (1)

Jack Wright
4:27PM NOV 24TH 2012
Will employees in orlando be hired back.I would like to see the bakery reopen.

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