Investors may soon strike some cream-filled gold on the stock market with the makers of Twinkies planning to go public.
Nearly four years after filing for bankruptcy protection and prompting fear that its snack line of Twinkies, Ding Dongs and Sno Balls would become extinct, Hostess Brands LLC is preparing to debut on the Nasdaq market within the next three months.
Hostess announced Tuesday a deal with Gores Holdings Inc. that plans to put the Kansas City-based company’s value at about $2.3 billion — 10.4 times larger than the company’s estimated 2016 value of $220 million, according to NPR.
The announcement comes nearly three years after eBay users offered boxes of 10 Twinkies for up to $15,000 in the face of severe financial and management difficulties, before the return of the golden, cream-filled cakes to shelves in July 2013.
Hostess presents “a unique opportunity to invest in an iconic brand with strong fundamentals that is poised for continued growth,” Alec Gores, chairman and chief executive of Gores Group, said in a statement.
Since emerging from bankruptcy, Hostess — founded in 1919 and made famous by the Twinkie in the 1930s — had been owned by the investment firm Apollo Global Management LLC along with Metropoulos & Company, who owned Pabst Blue Ribbon Beer in the past.
The two investment firms bought the bakery business for $410 million in 2013, according to the New York Times, and Hostess’ sales came to $650 million during the 12 months that ended May 31.
Now investors want to put up to $725 million into the brand with the help of the public stock sale, though Hostess’ current parent corporations will continue to own 42 percent of the company.
C. Dean Metropoulos, the bakery’s executive chairman, and William Toler, Hostess’ chief executive, will keep their positions.
“This new phase in Hostess’ evolution and partnership with the Gores Group and our broader investor partners will continue to propel Hostess into a growing and innovative company with significant reach and potential long into the future,” Mr. Metropoulos said in a statement.
