Hostess Brands Names Two Investment Firms As Potential Twinkie Buyers

Apollo Global Management (NYSE:APO) of New York and C. Dean Metropoulos & Co. of Greenwich, Conn., have been picked by the bankrupt company in a $400 million deal to buy the snack cake brands, including Twinkies, Ding Dongs and Donettes, Reuters reported.

Apollo is a major private equity firm, but has no experience in running a major processed food company. However, C. Dean Metropoulos does. The billionaire investor has had past investment in several well-known food brands, including Chef Boyardee pasta products and Pinnacle Foods (Aunt Jemima, Dunkan Hines and Log Cabin brands).

Even if the deal falls through, the $400 million price tag is the first indication of the cost of reviving one of America’s most beloved factory-processed, sugary, fatty and, to many, delicious snacks.

Hostess went into bankruptcy last November after years of struggle, including high CEO turnover, changing consumer eating habits and labor problems. A strike by a bakers union was the final blow that sent the 82-year-old Irving, Tex.-based company into insolvency.

The company has also named private McKee Foods Corp. (owner of the Little Debbie brand) and United States Bakery as bidders for other brands, bakeries and equipment.