Hostess Brands has entered into an agreement to acquire Voortman, a maker of cookies and wafers, from Swander Pace Capital for approximately $320 million.
Founded in 1951 by brothers William and Harry Voortman and headquartered in Burlington, Ontario, Canada, Voortman has distribution mainly in the US and Canada.
Hostess, which produces Twinkies and Zingers snack cakes, expects to close the transaction in early January 2020.
“Voortman is a leading brand with a well-defined consumer position that complements and extends the growing Hostess portfolio into the growing cookie and better-for-you sweet snacking categories with meaningful runway for future growth,” said Andy Callahan, Hostess Brands CEO.
“We believe the acquisition of Voortman will create significant value for all of our stakeholders. We expect the combination of Hostess’ lean, proven operating model and Voortman’s brand and adjacent category position, will result in meaningful cost savings and growth opportunities.
“This acquisition fits well into our long-term growth strategy and we are confident that Voortman will be a great addition to our existing sweet baked goods snacking and breakfast portfolio.”
Hostess expects the transaction to deliver on key growth opportunities while achieving at least $15 million in annual run-rate cost synergies within 12 to 18 months. Cost synergies have been identified primarily from leveraging the Hostess operating model, including procurement, operations and logistics.
The combined company expects to realise additional benefits of scale by sharing established infrastructure and through the strengthening of collaborative retail partnerships in the US and Canada.
Douglas MacFarlane, CEO of Voortman, said: “The team at Voortman is excited about becoming part of the Hostess portfolio and the prospects for further dramatic growth of the Voortman brand behind the exceptional capabilities of the Hostess organisation.”
Last week, Hostess Brands appointed Brian Purcell as its new CFO to replace Tom Peterson, who is transitioning to the newly created role of executive vice president, strategy and M&A.
© FoodBev Media Ltd 2019