Hostess Brands — best known for sugary baked treats such as Twinkies — has agreed to acquire the maker of Voortman wafers and sugar-free cookies for $320 million in a move to boost its profile in the fast-growing snacks category.
According to Nielsen, Canada-based Voortman Cookies is the market leader in crème wafers and sugar-free cookies. Its store sales grew at a compound rate of 5.1% during the past three years — nearly three times the rate of the overall $8.4 billion cookie category.
In announcing the acquisition on Monday, Hostess cited Voortman’s “uniquely positioned and differentiated products” and the potential for “greater growth opportunities provided by a more diverse portfolio of brands and products.”
“Voortman is a leading brand with a well-defined consumer position that complements and extends the growing Hostess portfolio into the growing cookie and better-for-you sweet snacking categories with meaningful runway for future growth,” CEO Andy Callahan said in a news release.
“This acquisition fits well into our long-term growth strategy and we are confident that Voortman will be a great addition to our existing sweet baked goods snacking and breakfast portfolio,” he added.
Hostess expects the deal will provide at least $15 million in annual run-rate cost synergies and approximately $20 million of incremental adjusted EBITDA in 2020, growing to $40 to $50 million by 2022.
As Food Dive reports, “While Hostess’ iconic line of Twinkies, Ding Dongs and coffee cakes is at the company’s core … the company has been bulking up its portfolio to attract consumers in adjacent areas where it didn’t have a major presence.”
Last year, it expanded its breakfast product lineup with the purchase of the Big Texas and Cloverhill brands. The Voortman deal allows it to move not only into cookies but also the better-for-you dessert segment.
Voortman was founded in 1951 by brothers William and Harry Voortman, whose father had operated a bakery in the Netherlands. In 2004, it became the first North American food brand to announce the removal of trans fats from its retail food products.