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Hostess Brands LLC, the maker of Twinkies and Ding Dongs, will be bought by a special purpose acquisition company, which will take the company public.
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Hostess to go public after its newest deal

ASSOCIATED PRESS

Hostess to go public after its newest deal

$2.3B to buy snack-maker includes debt

Hostess Brands LLC, the maker of Twinkies and Ding Dongs, said on Tuesday it will be bought in a $725 million deal by an affiliate of private equity company Gores Group, which will then take it public.

The Kansas City, Mo.-based snack cake company, which was founded in 1919, will be acquired by Gores Holdings Inc., a special purpose acquisition company (SPAC). Including debt, the total value of the deal is about $2.3 billion, Hostess said.

The company's products, especially the golden, cream-filled Twinkies cakes, are ingrained in American pop culture and have long been packed in children's lunch boxes.

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SPACs such as Gores Holdings have no assets but use their IPO proceeds, together with bank financing, to take companies public through acquisitions. The Hostess acquisition is expected to close by end of summer and Gores will then change its name to Hostess Brands Inc.

Hostess sold itself in 2013 to private equity firm Apollo Global Management LLC and consumer industry investor C. Dean Metropoulos for $410 million.

A year earlier in 2012, Hostess closed and then sold off its U.S.-based Wonder Bread operations to Thomasville, Ga.-based Flowers Foods Inc., including a bread and crouton-making operation in Northwood. Flowers Foods has not reopened the Northwood facility. It did not purchase another Hostess bakery in Defiance, Ohio, which also has remained idle.

The Wonder Bread operations no longer are affiliated with Hostess Brands.

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Apollo and Mr. Metropoulos will receive shares in the combined company worth an ownership stake of about 42 percent. Gores Holdings will pay Hostess $725 million in cash. About $173 million will be used to pay down debt.

Other investors, including Gores Group Chief Executive Alec Gores and Mr. Metropoulos, had committed $350 million through a private placement.

Under Apollo and Mr. Metropoulos, Hostess relaunched its brands and regained market share, focusing on distribution channels where it had lacked a significant presence, such as dollar stores and vending machines.

First Published July 6, 2016, 4:00 a.m.

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Hostess Brands LLC, the maker of Twinkies and Ding Dongs, will be bought by a special purpose acquisition company, which will take the company public.  (ASSOCIATED PRESS)
ASSOCIATED PRESS
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