J.M. Smucker on the cusp of closing $5bn deal to snap up Twinkies owner

11-Sep-2023 - Last updated on 11-Sep-2023 at 10:15 GMT

Smuckers is purportedly close to finalising a deal to snap up Twinkies maker, Hostess Brands. Pic: Hostess

The Dunkin’, Sahale Snacks and Uncrustables RTE sandwich-owner is purportedly nearing a deal to buy Hostess Brands, close sources have told the media.

Kansas-headquartered Hostess was founded in 1930 and is behind several iconic household brands, including Twinkies, Ho-Hos, Ding Dongs, Zingers and Voortman zero sugar cookies.

The company has weathered some major storms, having filed for bankruptcy twice - thanks to being saddled with debt and failing to come up with new snacks that excited consumers - before being heroically pulled from the mire by Greek billionaire C. Dean Metropoulos.

Today, Hostess has a market capitalisation of about $3.73bn, after a nearly 27% jump in its stock since news of the sale hit the media waves on 25 August, according to LSEG data. At the time, anonymous sources to media agencies that several companies had expressed interest, including Mondelez, Hershey, General Mills and PepsiCo.

Sweet deal

Now, J.M. Smucker is purportedly close to finalising a deal to acquire the Twinkies owners.

Figures quoted are between $4bn to almost $5bn, which excludes Hostess’ net debt of about $900m, said the sources.

Ohio headquartered J.M. Smucker Company - colloquially known as Smuckers - was founded in 1897 as a maker of apple butter. Today, the company has three major business units, producing consumer foods, pet foods and coffee.

The Orrville-based producer of big brand names such as Crosse & Blackwell, Carnation, Five Roses, Folgers and Meow Mix, among others posted net income of $183.6m - up from $109.8m - for Q1 2023, boosted by higher prices. Although net sales edged lower to $1.81bn from $1.87bn - a touch below Street expectations of $1.84bn - the Smuckers raised full-year guidance.

“Our first quarter results reflect a positive start to our fiscal year, including volume growth in every business segment,” said Mark Smucker, chair, president and CEO at the time.

Volume growth was primarily driven by Jif peanut butter, coffee products and contract manufacturing sales related to the divested pet food brands. The Hostess buyout - if successful - will no doubt add to a sweet bottom line, too.

Hostess and J.M. Smucker had not responded to a request for comment before news of the deal broke.