Hackman Capital Wins Bid for Hostess Brands’ Assets

Hackman Capital Partners saw an opportunity to turn Hostess Brands leftovers into an appetizing investment by acquiring the remaining assets of the former national bakery brand at a recent bankruptcy auction for $62.5 million.
Courtesy of flickr user Joey Harrison

Courtesy of flickr user Joey Harrison

Hackman Capital Partners saw an opportunity to turn Hostess Brands leftovers into an appetizing investment by acquiring the remaining assets of the former national bakery brand at a recent bankruptcy auction for $62.5 million.

“As one of the largest wholesale bakers and distributors in the United States, Hostess Brands’ properties were strategically located with great visibility and recognition within their respective communities,” Michael Hackman, CEO & founder of Hackman Capital Partners, said in a news release announcing the acquisition. “Many of the properties are in strong markets and on major regional distribution routes. This visibility and recognition has manifested itself in heightened interest and demand for the properties.”

The purchase includes nearly 3 million square feet of real estate, machinery, equipment and fleet assets in 34 states. The real estate holdings include seven plants along with more than 100 stores, garages, depots and several warehouses, according to a list provided to Commercial Property Executive.

The largest plant is at 9801 Blue Grass Road in Philadelphia, which has nearly 450,000 square feet. The other vacant factories are: 2330 Ripple St., 127,300 square feet, Los Angeles; 580 Julie Ann Way, 70,400 square feet, Oakland, Calif.; 6301 North Broadway, 376,950, St. Louis; 75 Demarest Drive, 25, 248 square feet, Wayne, N.J.; 747 West 5th St. & 460 Linn St., 87,134 square feet, Cincinnati; and 505 Downs St., 46,639 square feet, Defiance, Ohio.

The warehouses are a 12,750-square-foot facility at 2366 Newell St. in Waterloo, Iowa, and a 47,250-square-foot building at 885 East Taylor Ave. in St. Louis. A third warehouse, which is also listed as a garage and depot, is at 2519 South Grand St. in Monroe, La., and has 61,975 square feet of space.

Hackman Capital Partners, which specializes in transactions involving distressed companies, plans to sell all the properties and equipment.

The former Hostess Brands won bankruptcy court approval to auction off the assets that were not sold after the company ceased operations in November 2012. The 140 properties remained after the bankrupt company sold off its brands of breads and snack cakes and about 120 properties to buyers including Apollo Global Management, L.L.C., and Metropoulos & Co., which have resurrected the Twinkies.

The estate had wanted to sell the last properties individually or in small batches. After extensive negotiations, Hackman Capital Partners was named the stalking-horse bidder at the auction and entered with a bid of $58.3 million, according to The Wall Street Journal. Hackman said his firm was one of about 400 parties that submitted bids for the assets but the fact that his company offered to purchase all the properties at once “provided valuable confidence to the debtors’ estate.”

The Wall Street Journal reported that another company’s offer to buy the entire lot of assets pushed Hackman Capital Properties to the final price of $62.5 million.

Hackman Capital Acquisition Co., L.L.C., an affiliate of Hackman Capital Partners, served as the stalking-horse bidder at the auction.

“The Hostess bankruptcy translated into a rare opportunity to acquire significant real estate and equipment at one auction,” Hackman added.

Hackman Capital Partners, through its affiliated entities, owns more than 270 facilities throughout the United States, totaling 25 million square feet and more than 20,000 acres of developable land. In late June, a joint venture led by Hackman Capital Partners bought 28 industrial buildings and two land parcels in Ohio, totaling 2.6 million square feet. Sixteen of the properties are in Cleveland, seven in Cincinnati and five in Columbus. That transaction included two land parcels totaling 23.5 acres in Columbus. The price for the portfolio was not disclosed.

Taking advantage of another bankruptcy proceeding, Hackman Capital Partners, along with Calare Properties, acquired the former Evergreen Solar plant, a 448,000-square-foot factory in suburban Boston for approximately $8.5 million.