The J. M. Smucker Co. (NYSE:SJM) is set to acquire Hostess Brands, Inc. (NASDAQ:TWNK) in a $5.6B deal. Here are key facts about the takeover:
SJM is paying $34.25 per share, totaling around $5.6 billion (including $900 million of net debt), representing an adjusted EBITDA multiple of approximately 17.2x (based on Hostess Brands' full-year 2023 estimates).
The acquisition includes Hostess Brands' iconic sweet baked goods brands, such as Twinkies, CupCakes, and Donettes, as well as the Voortman cookie brand. It also includes manufacturing facilities in multiple locations across the U.S. and Canada.
The acquisition is projected to contribute approximately $1.5B in net sales, with an estimated mid-single-digit percentage annual growth rate. Anticipated annual cost synergies of around $100M are expected to be realized within the first two years of ownership.
The acquisition will be carried out through the subsidiary SSF Holdings, Inc., with an exchange offer to acquire all outstanding shares of Hostess at $34.25 per share; cash component will be funded through a combination of cash reserves, a bank term loan, and long-term public bonds.
The transaction is expected to close in the third quarter of The J.M. Smucker Co.'s current fiscal year, ending April 30, 2024. Unanimous approval has already been obtained from the boards of directors of both companies.