KANSAS CITY, Mo. (BUSINESS WIRE) — Hostess Brands, Inc. announced Thursday it is completing the acquisition of certain U.S. breakfast assets of ARYZTA LLC, including one of its Chicago Cloverhill bakery facilities and the Big Texas and Cloverhill brands. In addition to the brands, the acquisition includes supply partnerships with several key retailers of Hostess. Until June 2017, the bakery was a significant co-manufacturer to the company.
“This is an excellent enabling acquisition for the Hostess breakfast strategy and fills a key strategic gap in our product portfolio,” said Dean Metropoulos, Executive Chairman of Hostess. “The Big Texas and Cloverhill brands and private label partnerships will add significant strength to our growing breakfast business.”
Highlights of the transaction include the following:
- The Big Texas and Cloverhill brands distribution strength provides Hostess greater access to the club, vending, cash and carry and independent convenience stores sales channels; and provides for a strong breakfast partnership with several existing key retailers
- Significantly expands the Hostess range of offerings in the Breakfast category of Sweet Baked Goods (“SBG”), including HoneyBuns, Danish Pastries and Cinnamon Rolls, among other offerings. With this acquisition, the Company expects to reduce its reliance on co-manufacturing;
- The 137,000 square-foot bakery facility represents the largest individually-wrapped Danish pastry facility in North America;
“This strategic acquisition allows us to bring important product manufacturing in-house as we expand and drive growth in our breakfast product portfolio,” commented Bill Toler, President and Chief Executive Officer of Hostess. “In addition, this purchase will enable Hostess to forgo in-house capital investments and create significant value over the next few years.”
“We have had a long supply relationship with ARYZTA for our breakfast items and are eager to expand our growing breakfast offerings with these capabilities. In addition, the positioning and consumer loyalty to the Big Texas and Cloverhill brands will broaden our participation in a number of distribution outlets,” said Andy Jacobs, Chief Operating Officer of Hostess. “This acquisition will enhance our competitive position as we have the opportunity to further build our branded distribution and market share in the breakfast category within sweet baked goods1, as well as enhance new and existing retailer relationships, particularly in the complementary club and vending sales channels.”
1 For the 52-week period ended December 30, 2017, Breakfast represented 51% of the SBG category and Hostess has a 15% share compared to All Day Snacking, which represents 49% of the SBG category, where Hostess has a 20% share per Nielsen’s U.S. SBG category data.
About Hostess Brands, Inc.
The Company is one of the leading packaged food companies focused on developing, manufacturing, marketing, selling and distributing fresh sweet baked goods in the United States. The brand's history dates back to 1919, when the Hostess® CupCake was introduced to the public, followed by Twinkies® in 1930. Today, the Company produces a variety of new and classic treats including Ding Dongs®, Ho Hos®, Donettes®, Hostess Bake Shop and Fruit Pies, in addition to Twinkies® and CupCakes.