Post Foods on Wednesday joined several suitors making nonbinding bids to acquire the back-from-the-dead Hostess bakery for roughly $2 billion, a source close to the situation told The Post.
Grupo Bimbo, Flowers Foods and Swiss-based Aryzta AG also made offers by the late-afternoon deadline, sources said.
Aryzta, far from a household name in the US, is a big player in the food services space and owns Otis Spunkmeyer cookies, so it can envision some synergies with Hostess.
A few private equity firms, too, made offers but do not seem very interested due to the competition from the strategic players. Plus, many of the same PE firms last week bid for food service company AdvancePierre Foods in a $2 billion auction.
“PE firms are trying to work out where to focus their energy,” a source said.
Just two years after buying the Hostess snack cake business for $410 million, owners Apollo Global Management and billionaire C. Dean Metropoulos are looking to flip the maker of Twinkies, Donettes, Ho Hos, Ding Dongs and other snack brands for a high multiple.
They maintain a new owner can take the brand they bought out of liquidation and build revenue from its current $650 million level to near the $1 billion it attained before Hostess collapsed into Chapter 11 bankruptcy in January 2012.
“They are making a big point about how the business still has a long way to go,” a source said.
Preliminary offers value Hostess at around $2 billion, a 10x Ebitda multiple, sources said.
Sell-side banker Credit Suisse is offering any suitor financing at more than a 6.5x Ebitda multiple, indicating that it, too, values Hostess at 10x, since a levered deal of this type would require a buyer to put down about 35 percent of the money in an acquisition, sources said.
Flowers Foods, with a $5.6 billion value when including equity and debt, likely needs Hostess the most, sources said.
“If it loses Hostess to Bimbo [the world’s No. 1 baker], it is a big problem,” a source said.
Flowers has not shown interest in teaming with a PE firm and would likely issue shares to fund an acquisition, two sources said.
Suitors invited into the second round will take roughly the next six weeks to study the business before making binding offers.
“I don’t think anybody is ahead of anyone else,” a source said, indicating that most of the suitors will likely be invited into the second round.
Post Foods submitted an unsuccessful bid for Hostess assets during the bankruptcy and its view of the popular bakery has not changed, a source said.
The new Hostess has roughly 1,000 employees and five factories — compared with 9,000 employees and 14 plants prior to its reorganization. It relies on contract drivers to deliver products to stores less frequently than the old company did. (The new owners also retooled the Twinkies recipe so that the cakes could sit longer in the warehouse without going stale.)
Bimbo declined comment. Post and Flowers did not return calls by press time.