- Hostess Manufacturers will purchase Voortman, a producer of premium, branded wafers and sugar-free and specialty cookies, from Swander Tempo Capital for about $320 million.
- Hostess mentioned in a presentation concerning the acquisition that the transaction, anticipated to shut in January, provides the market chief for crème wafers and sugar-free cookies to Hostess’ portfolio. Voortman has had a compound annual progress charge of 5.1% at shops in the course of the previous three years — almost thrice the annual progress of the general $8.four billion cookie class.
- “Voortman is a number one model with a well-defined shopper place that enhances and extends the rising Hostess portfolio into the rising cookie and better-for-you candy snacking classes with significant runway for future progress,” Andy Callahan, Hostess’ president and CEO, mentioned in a press release.
Whereas Hostess’ iconic line of Twinkies, Ding Dongs and occasional muffins is on the firm’s core, since its resurgence in 2016, the corporate has been bulking up its portfolio to draw shoppers in adjoining areas the place it did not have a significant presence.
Final 12 months, the acquisition of Large Texas and Cloverhill manufacturers allowed Hostess to develop its breakfast product lineup with objects like honey buns, danishes and cinnamon rolls.
This newest deal diversifies Hostess’ product combine and will increase its focus in candy baked items and snacking by including Voortman crème wafers and sugar-free cookies to the fold. Whereas Hostess owns lots of the nation’s favourite candy baked items, it has no cookies. And Voortman’s sugar-free cookie line permits Hostess to even be within the better-for-you dessert phase.
Hostess touted the monetary advantages of the acquisition, together with the long-term progress impacts. The Twinkie maker mentioned it anticipated earnings per share to extend within the mid-single digits subsequent 12 months due to the deal, with double-digit will increase thereafter.
Underneath the watch of Callahan, who took the helm in Could 2018, Hostess has undergone a collection of main adjustments to put the corporate on firmer monetary footing.
It bought in-store bakery maker Superior Cake Merchandise to Sara Lee Frozen Bakery for $65 million. Traditionally, Hostess has succeeded in creating inventive new variations on its mainstay, center-of-the-store manufacturers, so it could have discovered it troublesome to make a transfer to the premium and fast-growing in-store bakery channels.
The corporate additionally introduced in August that it will transfer its company headquarters from Kansas Metropolis, Missouri to Kansas Metropolis, Kansas after receiving tax incentives and tax credit.
Hostess has shunned large offers in favor of smaller bolt-on acquisitions resembling Voortman, although it was rumored to be among the many consumers for Kellogg’s Keebler and Well-known Amos manufacturers — finally bought to Ferrero for $1.three billion.
Hostess’ gradual, methodical method to including smaller manufacturers to the combo permits the corporate to rigorously combine merchandise into its operations. The corporate is ready to generate significant value synergies and develop the manufacturers by making use of its product procurement, manufacturing, distribution and gross sales community experience when it makes an acquisition — some extent Hostess highlighted within the press launch saying the Voortman deal.
If historical past is any indication, Hostess is more likely to proceed down the identical path of including smaller, well-known manufacturers resembling Voortman to the fold. This technique will allow it to develop its attain into adjoining classes whereas preserving it squarely centered on snacking and the on-the-go shopper.