Hostess Brands to be acquired by J.M. Smucker in $5.6B cash, stock transaction

Hostess Brands (TWNK) announced that it has entered into a definitive agreement with J.M. Smucker (SJM) to acquire all of the outstanding shares of Hostess Brands in a cash and stock transaction valued at $34.25 per Hostess Brands share, representing a transaction value of approximately $5.6B, including the assumption of debt. Under the terms of the agreement, Hostess Brands shareholders will receive $30.00 in cash and 0.03002 shares of The J.M. Smucker Co. common stock for each share of Hostess Brands common stock. The purchase price represents a premium of approximately 54% to the closing price of $22.18 on August 24, the last trading day prior to press reports of a potential transaction. Under the terms of the agreement, The J.M. Smucker Co., through its wholly owned subsidiary SSF Holdings, Inc., will commence an exchange offer to acquire all outstanding shares of Hostess Brands. Stockholders will receive $30.00 in cash and 0.03002 shares of The J.M. Smucker Co. common stock for each share of Hostess Brands common stock. The closing of the exchange offer will be subject to certain conditions, including the tender of at least a majority of the outstanding shares of Hostess common stock and other customary closing conditions, including receipt of required regulatory approvals. Upon the successful completion of the exchange offer, The J.M. Smucker Co. will acquire all of the remaining shares of Hostess Brands common stock that were not acquired in the exchange offer through a second-step merger for the same consideration per share as paid in the exchange offer. The cash portion of the transaction is expected to be funded through a combination of cash on hand, a bank term loan and long-term public bonds. Both The J.M. Smucker Co. and Hostess Brands boards of directors have unanimously approved the transaction. The transaction is anticipated to close in the third quarter of The J.M. Smucker Co.’s current fiscal year ending April 30, 2024.