You may be wondering how this happened, since Hostess filed for bankruptcy. If you’re like me, you had no doubt that Twinkies would be back – somebody was gonna buy Hostess and re-start production, right?
Well, that’s pretty much what happened, but it gets a little more complicated than that. WARNING: Business words and stuff ahead!
After reading about four different business articles and looking up some terminology, I now have an MBA and think I can break it down with at least some accuracy like this:
Hostess is now owned by the private equity firms Apollo Global Management and Metropoulos & Co. This allows Hostess to bring back Twinkies and other beloved sweets.
There’s a bunch of gobbledygook (technical term) that means that these firms own Hostess under what’s called a “stalking horse bid”, which Wikipedia defines as “an attempt by a debtor to test the market in advance of an auction. The intent is to maximize the value of its assets as part of (or before) a court auction in case of bankruptcy.”
So, if I’ve researched correctly, basically Hostess will make their Twinkies, you will buy them, and this will inflate the value of Hostess as a company. The equity firms can then “flip” Hostess for what would probably be a large profit, selling it off to another company.
C. Dean Metropoulos, who is, by the way, worth $1.2 billion, has done this before with companies like International Home Foods.
What does this mean for you, the consumer and presumed lover of Twinkies? On July 15, you will witness “the sweetest comeback in the history of ever.” (Hostess’s words, not mine.)
I could have just said that in the first place, but I thought I’d give you a little business lesson in the process. Just get yourself a Twinkie and enjoy it.