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Issue Date: Vol. 53, No. 1, January 2013, Posted On: 1/11/2013


Flowers Foods Becomes Stalking Horse Bidder For Certain Hostess Bread Brands And Bakeries


Nick Montano
Nick@vendingtimes.net
TAGS: Flowers Foods Inc., Grupo Bimbo, Hostess Brands Inc., Hostess purchase assets, Wonder, Nature's Pride, Merita, Home Pride, Butternut Hostess bakeries, Hostess stalking horse bidder, packaged bakery foods, George E. Deese, Hostess bankruptcy, Hostess stalking horse bid, Tastykake

THOMASVILLE, GA -- Flowers Foods Inc. today announced it has signed two purchase agreements with Hostess Brands Inc. as the "stalking horse bidder" for certain Hostess assets. One of the agreements provides for the purchase by Flowers of the Wonder, Nature's Pride, Merita, Home Pride and Butternut bread brands; 20 bakeries; and approximately 38 depots for a purchase price of $360 million. The other agreement provides for the purchase by Flowers of the Beefsteak brand for $30 million.

The transactions are subject to a court-approved bankruptcy process being initiated by Hostess. If Flowers' stalking horse bids are approved by the bankruptcy court, the bids would then be subject to a competitive auction process to be held several weeks from now. The company would expect to close the transactions shortly following court approval if it is selected as the winning bidder. The transactions also are subject to regulatory clearance.

Flowers Foods has previously stated its interest in acquiring certain Hostess assets should they become available. "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 chief executive officer of Flowers Foods. "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."

Based on the current bid price, Flowers Foods would expect the transactions to be accretive to earnings in 2013. Flowers Foods plans to finance the transactions through a mix of available cash on hand and debt.

Headquartered in Thomasville, GA, Flowers Foods Inc. (NYSE: FLO) is the second-largest producer and marketer of packaged bakery foods for retail and foodservice customers in the U.S. with annual sales of more than $3 billion. Flowers operates 44 bakeries that produce a wide range of bakery products. These products currently are sold through a direct-store-delivery network with access to more than 70% of the U.S. population in the East, South and Southwest, as well as in certain markets in California. Select Flowers products are sold nationwide through customers' delivery systems. Among the company's top brands are Nature's Own and Tastykake.


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