The JM Smucker Co has signed a definitive agreement to acquire Hostess Brands, the owner of Twinkies snack cakes, for approximately $5.6 billion.
The acquisition includes Hostess’ net debt of around $900 million.
It also includes manufacturing facilities located in Emporia, Kansas; Burlington, Ontario; Chicago, Illinois; Columbus, Georgia; Indianapolis, Indiana, as well as the under-construction facility in Arkadelphia, Arkansas and a distribution facility in Edgerton, Kansas.
Additionally, approximately 3,000 employees will join JM Smucker as a result of this transaction.
The acquisition is said to bolster the company’s existing portfolio by introducing Hostess Brands’ snacks and sweet baked goods innovation to JM Smucker’s current line-up of brands across the coffee, peanut butter, frozen handhelds, fruit spreads, dog snacks and cat food categories.
In addition, JM Smucker said that the deal will strengthen its financial profile and provide shareholders “significant value by accelerating growth in convenient consumer occasions”.
Mark Smucker, president and CEO of JM Smucker, said: “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”.
He continued: “With this acquisition, we are adding an iconic sweet snacking platform; enhancing our ability to deliver brands consumers love and convenient solutions they desire; and leveraging the attributes Hostess Brands offers, including its strong convenience store distribution and leading innovation pipeline, combined with our strong commercial organisation and consistent retail execution across channels to drive continued growth.”
“Our organisation is well positioned to deliver on the great potential our expanded family of brands offers, as has been reflected by our history of growth through acquisition and the successful integration of new categories to our business. We look forward to this exciting new chapter for The JM Smucker Co.”
Andy Callahan, president and CEO of Hostess Brands, added: “Today represents another exciting chapter for Hostess Brands as we combine our iconic snacking brands with The JM Smucker Co.’s family of beloved brands. We believe this is the right partnership to accelerate growth and create meaningful value for consumers, customers and shareholders. Our companies share highly complementary go-to-market strategies, and we are very similar in our core business principles and operations.”
The deal is set to be finalised in the third quarter of JM Smucker’s current fiscal year, which ends on 30 April 2024.
Both JM Smucker and Hostess Brands’ boards of directors have given their unanimous approval for the transaction.
© FoodBev Media Ltd 2023