Hostess Brands Twinkies and Cup Cakes at a store in New York, on July 5, 2016.Brendan McDermid/Reuters
J.M. Smucker SJM-N said on Monday it will buy Twinkies-maker Hostess Brands TWNK-Q in a $5.6-billion deal, as major U.S. packaged food companies look to expand their brand portfolios with pandemic-era fortunes dwindling.
In recent months, the U.S. packaged food industry has seen an uptick in mergers as most of the companies seek to improve volumes by rebranding portfolios after benefits from price hikes started wavering.
The equity value of the deal stood at $4.55-billion, as per Reuters calculations, with Jif peanut butter maker J. M. Smucker paying Hostess shareholders $34.25 per share. The cash-and-stock offer represents a premium of 54 per cent on the stock since the day Reuters reported the company was exploring a sale.
Shares of Hostess have since surged 27 per cent and were up 19 per cent at $33.49 in premarket trading on Monday, while those of J.M. Smucker’s were down 7 per cent.
Hostess Brands became an acquisition target after its price hikes boosted revenue but fuelled investor concerns over its prospects with its volume growth consistently declining.
The J.M. Smucker and Hostess deal follows a spree of other deals including Campbell Soup’s $2.7-billion deal for Rao’s sauce maker Sovos Brands and Unilever’s purchase of premium frozen yogurt brand Yasso in North America.
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 (EBITDA) 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 had raised prices of its jams and jellies, which helped boost its profit forecast for the year.
J.M. Smucker on Monday agreed to buy Twinkies maker Hostess Brands for US$5.6-billion including debt in a deal that unites two major American snack makers.
TORONTO – Cineplex Inc. reported a loss in its latest quarter compared with a profit a year ago as it was hit by a fine for deceptive marketing practices imposed by the Competition Tribunal.
The movie theatre company says it lost $24.7 million or 39 cents per diluted share for the quarter ended Sept. 30 compared with a profit of $29.7 million or 40 cents per diluted share a year earlier.
The results in the most recent quarter included a $39.2-million provision related to the Competition Tribunal decision, which Cineplex is appealing.
The Competition Bureau accused the company of misleading theatregoers by not immediately presenting them with the full price of a movie ticket when they purchased seats online, a view the company has rejected.
Revenue for the quarter totalled $395.6 million, down from $414.5 million in the same quarter last year, while theatre attendance totalled 13.3 million for the quarter compared with nearly 15.7 million a year earlier.
Box office revenue per patron in the quarter climbed to $13.19 compared with $12 in the same quarter last year, while concession revenue per patron amounted to $9.85, up from $8.44 a year ago.
This report by The Canadian Press was first published Nov. 6, 2024.
TORONTO – Restaurant Brands International Inc. reported net income of US$357 million for its third quarter, down from US$364 million in the same quarter last year.
The company, which keeps its books in U.S. dollars, says its profit amounted to 79 cents US per diluted share for the quarter ended Sept. 30 compared with 79 cents US per diluted share a year earlier.
Revenue for the parent company of Tim Hortons, Burger King, Popeyes and Firehouse Subs, totalled US$2.29 billion, up from US$1.84 billion in the same quarter last year.
Consolidated comparable sales were up 0.3 per cent.
On an adjusted basis, Restaurant Brands says it earned 93 cents US per diluted share in its latest quarter, up from an adjusted profit of 90 cents US per diluted share a year earlier.
The average analyst estimate had been for a profit of 95 cents US per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 5, 2024.
ST. JOHN’S, N.L. – Fortis Inc. reported a third-quarter profit of $420 million, up from $394 million in the same quarter last year.
The electric and gas utility says the profit amounted to 85 cents per share for the quarter ended Sept. 30, up from 81 cents per share a year earlier.
Fortis says the increase was driven by rate base growth across its utilities, and strong earnings in Arizona largely reflecting new customer rates at Tucson Electric Power.
Revenue in the quarter totalled $2.77 billion, up from $2.72 billion in the same quarter last year.
On an adjusted basis, Fortis says it earned 85 cents per share in its latest quarter, up from an adjusted profit of 84 cents per share in the third quarter of 2023.
The average analyst estimate had been for a profit of 82 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 5, 2024.
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