Hostess Brands Considers Selling, Major Companies Show Interest

On August 25, Hostess Brands saw its stock price soar by nearly 30% during mid-day trading. By the end of the day, the stock had settled at a 21.7% increase. This uptick came after reports surfaced that the snack giant is considering a sale.

Interested Buyers In Hostess

Major companies have shown interest in acquiring Hostess Brands. General Mills, Mondelez International, PepsiCo, and Hershey Co. are among the companies reportedly eyeing the snack maker. Hostess has enlisted Morgan Stanley to offer financial advice during the negotiation process.

A Brief History of Hostess

Hostess Brands, founded in 1930, is famous for snack items like Twinkies, Ho-Hos, and Ding Dongs. The company has faced financial difficulties in the past, filing for bankruptcy in 2004 and 2012. In 2016, Gores Holdings acquired the company, with Apollo Global Management and the Metropoulos family retaining a 42% stake.

Previous Hostess Suitors

In past sale considerations, companies like Post Foods, Grupo Bimbo, Flowers Foods, and Aryzta were named as potential buyers. This time around, the list of interested parties includes some new heavy hitters in the food industry.

Hostess Diversification Efforts

Hostess has been expanding its product range in recent years. Notably, the company acquired Voortman Cookies in 2019 for $320 Million. This move allowed Hostess to break into the cookie and wafer market, catalyzing further growth.

Hostess Financial Overview

For the first half of this year, Hostess reported a net income of $70 Million, an increase from $65 Million during the same period last year. 

Revenues also saw a boost, totaling nearly $697 Million, up from $672 Million. As of June 30, the company’s total assets stood at $3.5 Billion, with liabilities at $1.67 Billion.

In summary, Hostess Brands is contemplating a sale, and the news has significantly increased its stock price. The snack maker’s future looks promising, with major companies showing interest and a diversified product portfolio.