KANSAS CITY — Hostess Brands, Inc. has entered into an agreement to acquire Voortman Cookies Ltd. from the private equity company Swander Pace Capital for approximately $320 million. The companies expect the transaction to close in January 2020. Voortman Cookies is a manufacturer of wafers, sugar-free and specialty cookies that is based in Burlington, Ont.
“Voortman is a leading brand with a well-defined consumer position that complements and extends the growing Hostess portfolio into the growing cookie and better-for-you sweet snacking categories with meaningful runway for future growth,” said Andrew P. Callahan, president and chief executive officer of Hostess Brands.”
Voortman is the No. 1 player in crème wafers and sugar free cookies, as reported by Nielsen for the 52-week period ended Nov. 2, 2019, and has achieved compound annual point of sale growth over the last three years of approximately 5%, according to data provided by Hostess Brands.
“We expect the combination of Hostess’ lean, proven operating model and Voortman’s brand and adjacent category position, will result in meaningful cost savings and growth opportunities,” Mr. Callahan said. “This acquisition fits well into our long-term growth strategy and we are confident that Voortman will be a great addition to our existing sweet baked goods snacking and breakfast portfolio.”
The acquisition will give Hostess Brands the opportunity to compete in the $8.4 billion cookie category. Hostess expects the acquisition to provide approximately $20 million of incremental adjusted EBITDA in 2020 and $40 million to $50 million by 2022. Mid-single digit earnings per share accretion is expected in 2020.