Hostess Brands to acquire Voortman for approximately $320M in cash
Hostess Brands and Voortman Cookies announced that they have executed an agreement under which Hostess will acquire Voortman, a leading and rapidly growing manufacturer of premium, branded wafers as well as sugar-free and specialty cookies, from Swander Pace Capital for approximately $320M in cash, including a customary working capital adjustment, representing a post-synergy 9.1x1 EBITDA transaction multiple. The transaction has been unanimously approved by the Hostess board of directors. Hostess expects to close the transaction in early January 2020, subject to customary closing conditions. Under the terms of the transaction agreement, Voortman will become a wholly owned subsidiary of Hostess. The company intends to finance the $320M transaction by using cash on its balance sheet, along with secured financing commitments from Credit Suisse and Citi. Net leverage immediately following the transaction is expected to be approximately 4.5x and be reduced to around 4.0x by the end of 2020. Hostess has a strong track record of reducing its net leverage and it remains committed to deleveraging quickly via organic growth and subsequent free cash flow generation. The transaction is expected to close in early January 2020, subject to customary closing conditions.