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January 15, 2013
THOMASVILLE, Ga. Flower Foods, Inc. last week announced two agreements as a "stalking horse bidder" to purchase assets from bankrupt Hostess Brands, Inc.
The Georgia-based company inked a $360 million deal to buy the following bread brands: Flowers of the Wonder, Nature's Pride, Merita, Home Pride and Butternut. The agreement also would include 20 bakeries and roughly 38 depots. In a separate pact, Flowers Foods would acquire the Beefsteak brand for $30 million.
Both agreements could fall apart because the stalking horse bids, even if approved by a bankruptcy court, are subject to an auction process that is designed to fetch the best price for the assets.
"This agreement is consistent with Flowers Foods' long-term growth objectives to reach significantly more of the U.S. population with its fresh breads, buns, and rolls," said George E. Deese, chairman and CEO of Flowers Foods, in a statement. "We believe these assets would enhance our ability, over time, to provide more U.S. consumers with quality baked foods at a good value through existing and new retail and foodservice customers."
Flower Foods plans to fund the deals through a combination of debt and cash.
Hostess, the iconic company with such marquee brands as CupCakes, Ding Dongs and Twinkies, is winding down and selling its businesses.
Hostess' Board of Directors authorized the wind down of Hostess Brands to preserve and maximize the value of the estate after the Bakery, Confectionary, Tobacco and Grain Millers Union (BCTGM) initiated a nationwide strike on Nov. 9, 2012. The snack maker last November asked the U.S. Bankruptcy Court for permission to shutter its operations and liquidate its assets. Hostess and the union were ordered to enter confidential mediation, but the talks were unsuccessful.
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