Flowers Foods completes acquisition of certain Hostess Brands assets

US-based producer of packaged bakery goods Flowers Foods has completed the acquisition of certain bread brands and assets from Old HB, formerly known as Hostess Brands, for $355m.

The acquisition includes Wonder, Nature’s Pride, Merita, Home Pride, and Butternut bread brands as well as 20 bakeries and 36 depots.

According to Flowers Foods, the acquisition reinforces its position as the second-largest baker in the US, and
will strengthen its ability to expand the geographic reach of its breads, buns, rolls, and snack cakes into new markets.

Flower Foods president and CEO Allen L. Shiver said that consumers across the country can expect to see these well-known bread brands returning to store shelves over time.

“These assets fit very well with our strategy to grow our fresh baked foods through market expansion and acquisitions,” Shiver added.

“We will continue our methodical market expansion, re-introducing the newly acquired brands into markets we currently serve and into new markets as we steadily expand into new regions of the country.”

On 8 July, Flowers Foods secured regulatory approval pursuant to the Hart-Scott-Rodino Act to acquire Hostess’ assets.

In February 2013, Flowers Foods announced that its bid to acquire certain Hostess Brands assets for $360m was declared as the highest bid; however, the final acquisition price was adjusted to $355m as a result of a purchase price adjustment related to the Butternut trademark.

In March 2013, the court overseeing the Old HB bankruptcy case approved the sale.

Hostess Brands filed for bankruptcy in January 2012, declaring assets of $982m and debt of $1.43bn, as it was affected by increasing labour costs and the changing tastes of consumers.

In November 2012, Hostess received approval from the US Bankruptcy Court in New York to close its business and sell its assets.

Flowers Foods, headquartered in Georgia, operates 44 bakeries that produce a wide range of bakery products for retail and foodservice customers in the US, and it reported sales of $3.05bn in 2012.