Twinkies Predictably Worth Almost As Much As Hostess Itself

So it looks like Apollo Global Management and Metropolous & Co. will be bringing back the Twinkie. And they're willing to pay almost as much for that right as Hostess said it was worth—all of it—when it filed for bankruptcy.
Author:
Publish date:
Updated on

So it looks like Apollo Global Management and Metropolous & Co. will be bringing back the Twinkie. And they're willing to pay almost as much for that right as Hostess said it was worth—all of it—when it filed for bankruptcy.

The private equity firms bid $410 million for most of Hostess' cakes, and certainly all of the important ones: Twinkies, Ding Dongs, CupCakes and Ho Hos, as well as some things called Donettes. (I've never heard of the latter. Were they available in the greater New York area during the late 80s and early 90s?)

That means Hostess Brands' current hedge-fund and private equity owners will get at least $850 million for the pieces of a company they said was worth only $450 million. And it probably still doesn't account for the money the new owners can skim off the top of the pension plan. Which makes us wonder whether this whole adventure was necessary at all, if Hostess and its owners had any idea how to run a business.

Hostess Chooses Apollo, Metropoulos as Lead Bidder [Bloomberg]
Apollo, Metropoulos Bid $410 Million for Most of Hostess Cake Assets [WSJ]

Related

New Hostess Owners' Infallible Business Plan: Zach Galifianakis And Healthy Twinkies

Now that the Apollo and Metropolous & Co. have officially bought the Twinkie—in an auction that drew precisely one bid, theirs—the private equity firms have figured out how to turn around a company that other private equity firms couldn't/ran into the ground. First, they're not going to rehire everyone. Second, they're going to outsource distribution. Lastly, and most importantly, they're going to hire Zach Galifianakis or Will Ferrell.

Twinkie Economics In Spain

The good people who used to run Hostess Brands aren't the only people who came up with the idea of raiding pensions to pay bills: