J.M. Smucker said on Monday it will buy Twinkies-maker Hostess Brands in a $5.6 billion deal, as major U.S. packaged food companies look to expand their brand portfolios with pandemic-era fortunes dwindling.
J. M. Smucker said the deal is expected to close in the third quarter of its current fiscal year and represents an adjusted earnings before interest, taxes, depreciation, and amortization of about 17.2 times based on its estimate of Hostess Brands 2023 results.
Campbell Soup's acquisition of Sovos Brands represented an adjusted EBITDA multiple of 14.6 times, including run rate savings, and 19.8 times excluding those. The food and tobacco sector currently trades at 14.4 projected 12-month EBITDA on average, according to LSEG data. Based in Lenexa, Kansas, Hostess was founded in 1930 and is behind several iconic household brands, including Ho-Hos, Ding Dongs, Zingers, and Voortman cookies and wafers.
J.M. Smucker, which also houses coffee and pet food brands, has a market valuation of over $14 billion and hadReporting by Dimpal Gulwani and Ananya Mariam Rajesh in Bengaluru and Anirban Sen and Abigail Summerville in New York; Editing by Savio D'Souza and Shinjini Ganguli
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