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Friday, January 11, 2013

Flowers Foods to purchase some Hostess brands for $390 mln, (NYSE: FLO)

Flowers Foods Inc on Friday said it has agreed to purchase Wonder and other well-known bread brands from Hostess Brands Inc for $390 million, as part of the latter company's bankruptcy reorganization. The Thomasville, Georgia-based company said it entered one contract to pay $360 million for the Wonder, Butternut, Home Pride, Merita and Nature's Pride brands, as well as 20 bakeries and 38 depots. It also agreed to pay $30 million for the Beefsteak brand.Flowers already owns brands such as Cobblestone Mill, Nature's Own and Tastykake. It said it expects the purchases to add to earnings in 2013, and that it would finance them with cash on hand plus debt.The purchase is subject to a court-supervised auction, and is subject to higher bids. Court approval of the winning bid is required.Hostess, which also made Twinkies and Drake's cakes, shut down its baking business late last year and abandoned efforts to reorganize under Chapter 11 after a crippling strike by its baker's union.

Flowers Foods, Inc. (Flowers Foods) is a producer and marketer of bakery products in the United States. Shares of FLO fell by 0.2% or $-0.05/share to $24.83. In the past year, the shares have traded as low as $18.46 and as high as $26.10. On average, 882834 shares of FLO exchange hands on a given day and today's volume is recorded at 598038.