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As
part of the deal, Gores Holdings Inc <GRSH.O>, set up by Gores
to make acquisitions and other deals, will pay $375 million in
cash to Hostess shareholders.
Other investors, including Gores Group Chief Executive Alec
Gores and C. Dean Metropoulos, have committed $350 million
through a private placement.
The current majority owners of Hostess, Apollo Global Management
LLC <APO.N> and Metropoulos, expect to hold a combined stake of
about 42 percent in Gores Holdings upon completion of the deal.
Hostess, which has filed for bankruptcy twice in its nearly
century-old history, generated sales of about $650 million in
the 12 months ended May 31.
Reuters reported in July last year that the company had scrapped
plans for a sale in favor of an initial public offering.
The deal with Gores is expected to close in the third quarter of
2016.
Deutsche Bank Securities Inc, Moelis & Co and Morgan Stanley
were financial advisers to Gores Holdings, while Weil, Gotshal &
Manges LLP was the legal adviser.
Rothschild & Co, Credit Suisse and Perella Weinberg Partners
were M&A advisers to Hostess. Morgan, Lewis & Bockius was legal
adviser to Apollo.
Paul, Weiss, Rifkind, Wharton & Garrison was legal adviser and
UBS acted as financial adviser to C. Dean Metropoulos and his
family.
(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Ted
Kerr and Saumyadeb Chakrabarty)
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