Flowers Foods is going to purchase Hostess brands for around $390 million
Flower Foods announced yesterday that they are planning to purchase hostess brands for about $390 million. This is part of the company’s initial bankruptcy reorganization plan. The company said that some of the brands they are going to purchase are Wonder, Home Pride, and Butternut along with twenty different bakeries and thirty eight depots.
There is also a strong possibility that the company is going to purchase a beefsteak brand for around $30 million in the future. The company has already acquired other brands in the past few months such as Cobblestone and Mill. Representatives for the company believe that this move will increase their earnings this year and that they will be able to finance all these purchases using cash and debt.
These purchases will be subject to bids that are higher and there is a strong possibility that other companies will end up buying them, not flower foods. The auction will be supervised by the court and will eventually be approved by judges and regulators. The company has previously asked for the bidding auction to take place next month with an official hearing taking place next March.
If the company ends up winning the bidding process, it will end up beating companies such SAB and Sara Lee. Some of these brands have already announced that they will directly sell their company to Flower Foods after the screened 169 different prospective buyers. 87 of these companies weren’t verified yet due to them signing confidentiality agreements.
Flower Foods first decided to shut down its business after a liquidation process that took place after the baker’s union strike. One of the company’s bankers, Nathan Scherer, informed reported that some of the other competing companies are furious that some brands have agreed to be acquired by us.
Many experts were also surprised with some of the brand’s decisions especially that some of the prospective buyers include Wal-Mart, one of the biggest supermarket brands in the United States. The company’s bankruptcy case is currently being held in the New York until next month but many experts believe that this move will end the company’s bankruptcy and increase their profits gradually.
No one knows if the company will be successful in purchasing all these brands as some of the competitors aren’t known yet. However, it is obvious that the bidding process will be very strong. Representatives for Flower Foods said yesterday that they will do everything they can to win this auction.