Flowers Foods Inc (FLO.N) on Friday said it has agreed to buy Wonder and other well-known bread brands from Hostess Brands Inc for $390 million, as part of the latter company's bankruptcy reorganization.
The Thomasville, Georgia-based company said it entered one contract to pay $360 million for the Wonder, Butternut, Home Pride, Merita and Nature's Pride brands, as well as 20 bakeries and 38 depots. It also agreed to pay $30 million for the Beefsteak brand.
Flowers already owns brands such as Cobblestone Mill, Nature's Own and Tastykake. It said it expects the purchases to add to earnings in 2013, and that it would finance them with cash on hand plus debt.
The purchase is subject to a court-supervised auction, and is subject to higher bids. Court approval of the winning bid is required.
Hostess, which also made Twinkies and Drake's cakes, shut down its baking business late last year and abandoned efforts to reorganize under Chapter 11 after a crippling strike by its baker's union.
The case is In re: Hostess Brands Inc et al, U.S. Bankruptcy Court, Southern District of New York, No. 12-22052.
(Reporting By Tom Hals in Wilmington, Delaware and Jonathan Stempel in New York)