Hostess Brands LLC Halts Auction, Will Focus On IPO

Hostess Brands IPO

Hostess Brands LLC, maker of Twinkies and Ding Dongs, has pulled itself from the auction block and will instead pursue an initial public offering (IPO).

The company, after filing for bankruptcy in 2013, was picked up by private equity firm Apollo Global Management LLC and consumer industry investor C. Dean Metropoulos for $410 million.

In early 2015 Hostess began to search for a new owner. The company chose in recent weeks to turn down offers that valued the company between $2.4 billion and $2.5 billion, including debt.

The company now plans to borrow money which will be used to pay a dividend to its owners. The company will then prepare for an IPO that should develop a higher valuation.

Apollo, Hostess and Metropoulos have not commented on the company’s upcoming IPO at this time.

Hostess was founded in 1930 and quickly became one of the country’s largest wholesale bakers and bread and snack distributors. The company was led by its very popular Twinkies cakes.

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Hostess was forced into bankruptcy three years ago because of heavy debt and burdensome wage and pension obligations.

Since its takeover Hostess has focused on better distribution and targeting underserved markets including dollar stores and vending machines.

Standard & Poor’s Financial Services LLC analysts claim that Hostess’s market share is still below pre-bankruptcy levels. The company still trails McKee Foods Corp. for the number one snack spot in the United States.