Massachusetts is among the many states in which Hostess breads and snacks were at one time iconic foods until the company’s bankruptcy in 2012. Now, a business sale has been approved by the court that will allow the company to liquidate the last of its major lines of products, bringing the sale price for the company’s assets to a total of $860 million.
Hostess has sold Drake’s, the line that sold snack cakes, to McKee foods for $27.5 million. The company is also selling several bread and cake lines to United States Bakery Inc., Flowers Foods, Grupo Bimbo and other investors also purchased various lines including the famous Twinkie snack food. In each case, the company to which the business line was sold was the highest of several bidders.
The Texas-based Hostess filed for Chapter 11 after a nationwide strike. The company still has some minor brand lines, buildings and equipment for sale. Many of the company’s former brands will be back on the shelves for sale in the next few months as part of production by different management companies.
Business bankruptcies often create opportunities for investors to buy assets at reduced prices. Many commercial sales are completed when one of the parties needs an infusion of cash to satisfy creditors. As in this case, businesses often bid for the right to buy other companies, so it is important to have the highest bid. However, it is also very important for the bidding company to ensure they do not pay too much for the purchased company. A business lawyer may be able to offer advice to a purchasing company during the sales process.
Source: Boston, “Court approves sale of last core Hostess items,” April 9, 2013