Smucker to buy Hostess in deal set at $5.6 billion

Hostess, the maker of snack classics like Twinkies and HoHos, is being sold to J.M. Smucker in a cash-and-stock deal worth about $5.6 billion.

Smucker, which makes everything from coffee to peanut butter and jelly, will pay $34.25 per share in cash and stock, and it will also pick up about $900 million in net debt.

Hostess Brands Inc. shareholders will receive $30 in cash and 0.03002 shares of The J.M. Smucker Co. stock for each share of stock they own.

Twinkies went big when Hostess put them on shelves in 1930, and it followed up with a string of sweet concoctions like DingDongs, Zingers and Sno Balls.

Hostess motored along for decades, but its struggles began to grow in this century, with workers blaming mismanagement and a failure to invest in brands to keep up with changing tastes.

The Lenexa, Kansas, company said that it was weighed down by higher pension and medical costs than its competitors, whose employees weren’t unionized.

By 2012, the company with roots dating back to 1925, began selling o ff its brands in chunks to different buyers.

Wonder was sold to Flowers Foods. McKee Foods, which makes Little Debbie snack cakes, snapped up Drake’s Cake, which includes Devil Dogs and Yodels.

The rest, including Twinkies and other Hostess cakes, was acquired by Metropoulos & Co. and Apollo, for $410 million.

Hostess reemerged in 2013 with a far less costly operating structure than its predecessor company — and it was no longer unionized.

The boards of The J.M. Smucker Co. and Hostess have both approved the deal.