Lessons from a Twinkie

Share

Screenshot (81)As Seen in CFO Studio Magazine 2015 Q3 Issue

The miraculous resurrection of Hostess Brands is proof positive that, if acquired at the right price, and approached with the right vision, almost any business has the potential for rehabilitation. Billionaire C. Dean Metropoulos and Apollo Global’s Andy Jhawar performed just such a corporate miracle. How? Forbes reports that it was a scorched-earth approach involving a complete liquidation of the former company, unbundling brands, severing ties with dead-weight subsidiaries, and washing away a staggering debt load. However, Metropoulos made the important decision to remain sensitive to the history of the Hostess brand.

By nurturing top assets, pruning away dead ones, and modernizing manufacturing and distribution, Metropoulos streamlined and transformed Hostess into one of the most efficient food companies in the business. Now, two years after its acquisition, Metropoulos and Apollo are poised to make $2 billion on a $180 million equity investment.

Forbes quotes one banker saying, “What they’ve done at Hostess should be a Harvard Business School case study on how to turn around a business.” Call the class Twinkie 101.

Copyright 2017