Once bankrupt, Hostess could be worth billions
In 2012, Hostess, the iconic American bakery giant behind Ding Dongs, Ho Ho’s and Twinkies, was bankrupt, with plans to slash more than 18,000 jobs and close its doors for good amid a crippling nationwide strike.
Then, in 2013, a snack-cake savior appeared. The Kansas City, Mo.-based sweets maker was bought for $410 million by a partnership between privateequity giant Apollo Global Management and C. Dean Metropoulos, a billionaire turnaround specialist known as “Mr. Shelf Space” for his revival of brands like Vlasic, Hungry-Man and Chef Boyardee.
Now, the iconic dessert titan is resurgent, selling its golden, creamfilled Twinkies across the world under the name Hostess Brands and turning down $2 billion offers from a pack of hopeful buyers. On Tuesday, the company reached its latest peak when Reuters, citing anonymous sources, suggested Hostess would head to Wall Street with an initial public offering that would value the company at around $2.5 billion.
In an interview, Metropoulos, swatted back rumors, saying “it was too early to consider a sale or IPO at this time.” The legendary brand on which they had pledged millions in repairs, he said, still had plenty of room to climb.
“We feel that we’re just two years into this wonderful turnaround of this company and that there’s a lot of potential growth to consider.”
Its sales have yet to recover to the nearly $1 billion a year it reached before the bankruptcy. But by following a turnaround playbook refined by Metropoulos — slashing jobs and costs, investing in automation, spending on marketing campaigns that dubbed Twinkies’ return “The Sweetest Comeback in the History of Ever” — the company has arisen from the ashes to regain a place in U.S. pantries — and ensure another profitable flip for its rescue team.
Metropoulos said over the past few weeks he had received “a number of calls” to buy the company and fielded a proposal from bankers over a potential Hostess stock-market debut. He would not offer details on how much they could raise in an IPO. An Apollo spokesman declined to comment.
Metropoulos’ megadeals have tended to focus on troubled but well-known household names that he can buy for cheap, reinvigorate for a few years, then sell with a turnaround story to a longterm operator or highest bidder.
But he would set no timeline for when he expected to flip this company, saying only that corporate leaders would “continue to focus this coming year on expanding the business,” and adding, “It’s hard to call when we will consider something.”
In two years, Metropoulos said, the leaders have invested more than $150 million in “improvements and efficiencies” at bakery plants, and spent hundreds of millions on marketing