Twinkies maker Hostess Brands LLC is in negotiations to buy Give and Go Prepared Foods Corp, a Canadian maker of thaw-and-serve sweet baked goods such as Two-Bite Brownies.
The company, based in Toronto, is owned by OMERS Private Equity.
The equity firm, which runs the buyout arm of the Ontario Municipal Employees Retirement System, has been exploring an exit strategy that would include an acquisition or an initial public offering (IPO) of Give and Go.
An acquisition would make sense for Hostess, which is facing increased competition from Give and Go.
People close to the deal say OMERS wants upwards of $800 million for the company.
Give and Go and OMERS did not respond to requests for comment.
Hostess, owned by Apollo Global Management LLC and consumer industry investor C. Dean Metropoulos, explored its own sale earlier this year but decided an IPO would be more lucrative. The company has not yet revealed plans for its IPO.
Along with its Two-Bite miniature baked treats and Kimberly’s Bakeshoppe cupcakes, Give and Go also provides private-label products to retailers across Canada, the United States, Mexico, Europe, Australia and Japan.