Hostess Finds Drake's Buyer
Hostess also said United States Bakery Inc. offered to buy certain bread brands for $28.9 million.
"The contemplated purchase prices for Drake's and the four bread brands, together with our previous announced stalking horse bid for the majority of our bread business, means we have agreements to sell these assets for at least $440 million," Hostess chief executive officer Gregory F. Rayburn said in a statement.
United States Bakery agreed to buy the Sweetheart, Eddy's, Standish Farms and Grandma Emilie's bread brands, four bakeries and 14 depots, plus certain equipment, according to the statement.
Drake's products include Devil Dogs, Ring Dings, Yodels, Yankee Doodles, Sunny Doodles, Funny Bones and Drake's Coffee Cake, according to court papers filed today.
Flowers Foods, based in Thomasville, Ga., will serve as the lead, or stalking-horse, bidder for Hostess's Wonder, Butternut, Home Pride, Merita and Nature's Pride brands, 20 bread plants, 38 depots and other assets. Flowers is offering $360 million, plus $30 million for the Beefsteak brand. An auction is set for February 28, followed by a hearing to authorize the sales.
Hostess, previously known as Interstate Bakeries Corp., exited an earlier bankruptcy in 2009 under the control of buyout firm Ripplewood Holdings LLC and lenders. Hostess entered bankruptcy again in January 2012.