UPDATE: Jan. 7, 2020:According to Food Business News, theacquisition was finalizedon Jan. 3, 2020.
Dive Brief:
- Hostess Brandswill acquire Voortman,生产优质品牌晶片和苏gar-free and specialty cookies, from Swander Pace Capital for approximately $320 million.
- Hostess said in apresentation about the acquisitionthat the transaction, expected to close in January, adds the market leader for crème wafers and sugar-free cookies to Hostess' portfolio. Voortman has had a compound annual growth rate of 5.1% at stores during the past three years — nearly three times the annual growth of the overall $8.4 billion cookie category.
- “Voortman is a leading brand with a well-defined consumer position that complements and extends the growing Hostess portfolio into the growing cookie and better-for-you sweet snacking categories with meaningful runway for future growth,” Andy Callahan, Hostess’ president and CEO, said in a statement.
Dive Insight:
While Hostess' iconic line ofTwinkies, Ding Dongs and coffee cakes is at the company's core, since itsresurgence in 2016, the company has been bulking up its portfolio to attract consumers in adjacent areas where it didn't have a major presence.
Last year, thepurchase of Big Texas and Cloverhill brandsallowed Hostess to expand its breakfast product lineup with items like honey buns, danishes and cinnamon rolls.
This latest deal diversifies Hostess' product mix and increases its focus in sweet baked goods and snacking by adding Voortman crème wafers and sugar-free cookies to the fold. While Hostess owns many of the nation's favorite sweet baked goods, it has no cookies.And Voortman's sugar-free cookie line allows Hostess to also be in the better-for-you dessert segment.
Hostess touted the financial benefits of the acquisition, including the long-term growth impacts.The Twinkie maker said it expected earnings per share to increase in the mid-single digits next year because of the deal, with double-digit increases thereafter.
Under the watch ofCallahan, who took the helm in May 2018, Hostess has undergone a series of major changes to place the company on firmer financial footing.
Itsoldin-store bakery maker Superior Cake Productsto Sara Lee Frozen Bakery for $65 million.Historically, Hostess has succeeded in developing creative new variations on its mainstay, center-of-the-store brands, so it may have found it difficult to make a move to the premium and fast-growing in-store bakery channels.
The company also announced in August that itwould moveits corporate headquartersfrom Kansas City, Missouri to Kansas City, Kansas after receiving tax incentives and tax credits.
Hostess has shunned big deals in favor of smaller bolt-on acquisitions such as Voortman, though it was rumored to be among the interested buyers for Kellogg's Keebler and Famous Amos brands — eventuallysold toFerrero for $1.3 billion.
女主人的缓慢而有条不紊的添加小er brands to the mix allows the company to carefully integrate products into its operations. The company is able to generate meaningful cost synergies and grow the brands by applying its product procurement, manufacturing, distribution and sales network expertise when it makes an acquisition — a point Hostess highlighted in the press release announcing theVoortman deal.
If history is any indication, Hostess is likely to continue down the same path of adding smaller, well-known brands such as Voortman to the fold. This strategy will enable it to expand its reach into adjacent categories while keeping it squarely focused on snacking and the on-the-go consumer.
