Sep 11, 2023 - Economy

J.M. Smucker to buy Twinkie maker Hostess for $5.6 billion

Photo by Scott Olson/Getty Images.

J.M. Smucker on Monday announced that it will buy Twinkie maker Hostess Brands for around $5.6 billion.

Why it matters: It's very high price for an iconic snack maker that's gone bankrupt twice in the past two decades.

Details: Smucker is paying $35.25 per share in cash and stock, which represents a 59% premium to where Hostess shares were trading before recent news reports about the sale process.

  • The purchase price includes around $900 million of net debt, and works out to an adjusted EDBITDA multiple of 17.2x.
  • Hostess brands include Twinkie, Ding Dongs, Ho Hos, CupCakes, Snoballs, Fruit Pies and Cloverhill Bakery.

Bottom line: Strategics have been active in the snack space, scooping up brands that can help complement their portfolios, says Axios Pro's Kimberly Chin.

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