Acquiring the snack cake assets required a complete overhaul of the legacy manufacturing and distribution footprints, an undertaking which drove away many competing bidders and allowed funds managed by Apollo to invest in the new Hostess at an attractive creation multiple.Upon completion of the original transaction, Hostess successfully reopened three upgraded bakery facilities and ultimately relaunched the snack cake line, with original Year 5 projected EBITDA achieved by Year 2.With its well-invested plants, strong technical expertise and long-standing customer base, Apollo believed Verallia would thrive as a stand-alone company, as opposed to continuing to operate as a non-core division within a much larger corporate framework.As an independent company, Apollo felt there would be meaningful opportunities to streamline costs and focus on free cash flow optimization, leading to operational and organizational improvements.Dean Metropoulos to acquire the majority of the assets of Hostess Brands’ snack cake business out of bankruptcy, investing nearly 0 million.
Imbued with a diverse set of skills developed across market cycles, Apollo pursues many paths to value, including through , and often goes “against the grain” of what other investors are doing, to target investments on behalf of managed funds at deep discounts to market averages.
Apollo was attracted to Hostess’ strong brand names and loyal customer base and had conviction in “relaunching” the business with a more streamlined and efficient cost structure.
Apollo was able to help in identifying and carving out the specific product portfolio and assets which were most attractive and help to rebuild a corporate organization and structure around these assets.
Apollo established AION Capital Partners as a strategic partnership with ICICI Bank Ltd., the largest non-government bank in India, to deliver risk-adjusted returns by investing in equity and/or debt at attractive values and at favorable points within the capital structure.
AION’s investments are highly structured, a core strength of Apollo’s, and provide for equity upside with credit-like downside protection in the Indian market.