The J.M. Smucker Company, more commonly known on jelly jars as Smucker’s, announced the signing of an agreement Monday to acquire Hostess Brands, Inc., the creator of Twinkies, HoHos and other packaged treats.
Smucker’s, which makes everything from coffee to peanut butter and jelly, will pay $34.25 per share in cash and stock, and it will also pick up approximately $900 million in net debt.
Hostess shareholders will receive $30 in cash and 0.03002 shares of The J.M. Smucker Co. stock for each share of stock that they own.
The deal also includes Hostess’s manufacturing facilities in Emporia, Kansas; Burlington, Ontario; Chicago; Columbus, Georgia; Indianapolis, and Arkadelphia, Arkansas (which is currently under construction), plus a distribution facility in Edgerton, Kansas.
According to Smucker’s, about 3,000 employees will join the company in conjunction with the transaction.
Smucker’s is headquartered in Orrville, Ohio, and the company produces peanut butter, fruit spreads, dog and cat food products and other items.
Mark Smucker, chair of the board, president and chief executive officer, said the deal allows the company to expand its product offerings.
“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,” Smucker said.
Twinkies went big when Hostess put them on shelves in 1930, and it followed up with a string of such sweet concoctions as DingDongs, Zingers and Sno Balls.
The company motored along for decades, but its struggles began to grow this century, with workers blaming mismanagement and a failure to invest in brands to keep up with changing tastes. The Lenexa, Kansas, company said that it was weighed down by higher pension and medical costs than its competitors, whose employees weren’t unionized.
By 2012, the company, which has roots dating back to 1925, began selling off its brands in chunks to different buyers. Wonder was sold to Flowers Foods. McKee Foods, which makes Little Debbie snack cakes, snapped up Drake’s Cake, which includes Devil Dogs and Yodels.
The rest, including Twinkies and other Hostess cakes, was acquired by Metropoulos & Co. and Apollo, for $410 million.
Apollo Global Management, founded by Leon Black, buys troubled brands and tries to turn them around before selling them. It’s done so with fast-food chains Carl’s Jr. and Hardee’s. Metropoulos & Co., which has revamped then sold off brands including Chef Boyardee and Bumble Bee, also owns Pabst Brewing Co.
Hostess reemerged in 2013 with a far less costly operating structure than its predecessor company and was no longer unionized.
The transaction is anticipated to close in the third quarter of the company’s current fiscal year ending April 30, 2024. The transaction has been unanimously approved by the boards of directors of both The J.M. Smucker Co. and Hostess Brands, Inc.
The Associated Press contributed to this report.