Lenexa, Kansas-based Hostess Brands Inc. has entered into an agreement with Orrville, Ohio-based The J.M. Smucker Co. to acquire Hostess Brands in a cash and stock transaction valued at $34.25 per Hostess Brands share, representing a transaction value of about $5.6 billion, including the assumption of debt.
The transaction includes the Hostess Brands sweet baked goods brands (Hostess Donettes, Twinkies, CupCakes, DingDongs, Zingers, CoffeeCakes, HoHos, Mini Muffins and Fruit Pies) and the Voortman cookie brand, along with manufacturing facilities in Emporia, Kansas; Burlington, Ontario; Chicago, Illinois; Columbus, Georgia; Indianapolis, Indiana and Arkadelphia, Arkansas (which is currently under construction) and a distribution facility in Edgerton, Kansas.
Additionally, about 3,000 employees will join The J.M. Smucker Co. in conjunction with the transaction.
“I am extremely proud of the entire Hostess Brands team for the legacy they created in building a premier snacking company and driving industry leading returns for our investors. Today represents another exciting chapter for our company as we combine our iconic snacking brands with The J.M. Smucker Co.’s family of beloved brands. We believe this is the right partnership to accelerate growth and create meaningful value for consumers, customers and shareholders,” said Andy Callahan, president and CEO of Hostess Brands.
“Our companies share highly complementary go-to-market strategies, and we are very similar in our core business principles and operations. Above all else, Hostess Brands and The J.M. Smucker Co. share a deep commitment to inspiring moments of joy and satisfaction through our products, and we look forward to continuing to do so as part of The J.M. Smucker Co. family.”
Under the terms of the agreement, Hostess Brands shareholders will receive $30 in cash and 0.03002 shares of The J.M. Smucker Co. common stock for each share of Hostess Brands common stock. The purchase price represents a premium of about 54 percent to the closing price of $22.18 on Aug. 24, the last trading day prior to press reports of a potential transaction.
“We are excited to announce the acquisition of Hostess Brands, which represents a compelling expansion of our family of brands and a unique opportunity to accelerate our focus on delighting consumers with convenient solutions across different meal and snacking occasions,” said Mark Smucker, chair of the board, president and CEO of The J.M. Smucker Co.
“With this acquisition, we are adding an iconic sweet snacking platform, enhancing our ability to deliver brands consumers love and convenient solutions they desire and leveraging the attributes Hostess offers, including its strong convenience store distribution and leading innovation pipeline, combined with our strong commercial organization and consistent retail execution across channels to drive continued growth. Our organization is well positioned to deliver on the great potential our expanded family of brands offers, as has been reflected by our history of growth through acquisition and the successful integration of new categories to our business. We look forward to this exciting new chapter for The J.M. Smucker Co.”
Both The J.M. Smucker Co. and Hostess Brands boards of directors have unanimously approved the transaction. The transaction is anticipated to close in the third quarter of The J.M. Smucker Co.’s current fiscal year ending April 30.
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