Hostess Brands to sell remaining bread brands to United States Bakery

Hostess Brands, the US-based bankrupt producer of bakery products, has selected United States Bakery’s $30.9m bid as the winning bid for certain bread brands of the company.

United States Bakery placed the bid for Hostess’ remaining bread brands – Sweetheart, Eddy’s, Standish Farms, and Grandma Emilie’s, as well as four bakeries, 14 depots, and certain equipment.

Hostess said that the deal will be presented for approval to the US Bankruptcy Court for the Southern District of New York.

The final offer represents a 2.8% increase on United States Bakery’s original stalking horse bid.

Recently, Hostess selected the $27.5m stalking horse bid by snack food manufacturer McKee Foods as the winning bid for the company’s Drake’s snack cake brand.

The company’s other proposed transactions include the sale of the majority of its snack cake business in a $410m deal to private equity firms Apollo Global Management and Metropoulos; and the sale of the majority of its bread business to Flowers Foods, for $360m.

In addition, Hostess Brands selected Grupo Bimbo as the winning bidder for the assets related to the company’s Beefsteak bread business.

Founded in 1930, Hostess Brands has been affected by increasing debts, soaring labour costs and the changing tastes of consumers; it filed for bankruptcy in January 2012 for the second time in its history, declaring assets of $982m and debt of $1.43bn.

In November 2012, Hostess received approval from the US Bankruptcy Court in New York to close its business and sell its assets.