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Hostess Gets New Owner, Enters Next Phase of Evolution

LOS ANGELES — Ownership changes are coming to Hostess once again.

Hostess Brands LLC has reached an agreement with Gores Holding, a special-purpose acquisition company sponsored by an affiliate of The Gores Group LLC. The transaction will introduce Hostess as a publicly listed company, with an anticipated initial enterprise value of approximately $2.3 billion.

Along with the $375 million of cash held in Gores Holdings' trust account, additional investors have committed to participate via $350-million private placement, led by Alec Gores, chairman and CEO of The Gores Group, and comprising large institutional investors, C. Dean Metropoulos (via $50 million of additional rollover contribution), and Gores affiliates.

C. Dean Metropoulos and family, and funds managed by affiliates of Apollo Global Management LLC — the current majority owners of Hostess — expect to hold an approximately 42-percent combined stake in Gores Holdings upon completion of the transaction.

Dean Metropoulos and William Toler will continue to lead the company as executive chairman and CEO, respectively.

"I have enjoyed working together with Apollo to build a vibrant and exciting company, and we are pleased to partner with the Gores Holdings team as we move to the next stage of Hostess' growth and expansion," Dean Metropoulos said. "We look forward to continuing both our strong organic growth through unique innovations and niche, strategic acquisitions, such as our recent acquisition of Superior Baking, which will extend Hostess' consumer reach in the 'in-store bakery' market and expand offerings to customers.

"This new phase in Hostess' evolution and partnership with The Gores Group and our broader investor partners will continue to propel Hostess into a growing and innovative company with significant reach and potential long into the future," he added. "We are very excited to continue to build this wonderful company and its iconic brands."

The deal has been unanimously approved by the boards of directors of both Gores Holdings and Hostess, and is expected to close in the third quarter, subject to the receipt of regulatory approval, and approval of the stockholders of Gores Holdings. Upon closing, the name of the company will be changed to Hostess Brands Inc.

"We are pleased to partner with Dean, Bill and Apollo to introduce Hostess as a publicly listed company. We have evaluated a number of potential acquisitions for Gores Holdings and believe this transaction offers a superior option for our stockholders," said Alec Gores. "Hostess presents a unique opportunity to invest in an iconic brand with strong fundamentals that is poised for continued growth. We look forward to working with the team at Hostess as we collaborate to further capitalize on these attractive growth prospects."

Hostess hung a for-sale sign on its assets when it filed for bankruptcy in U.S. Bankruptcy Court for the Southern District of New York in White Plains, N.Y., in November 2012. Apollo Global Management LLC and Metropoulos & Co. for approval to the U.S. Bankruptcy Court for the Southern District of New York at hearing on March 19, 2013, as CSNews Online previously reported.

Hostess was founded in 1919 with the introduction of the Hostess CupCake. Today, Hostess Brands produces a variety of offerings including Ding Dongs, Ho Hos, Donettes and Fruit Pies, in addition to Twinkies and CupCakes.

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