Flowers Foods Inc., a producer of packaged bakery foods, obtained a $300 million loan to help finance its acquisition of Hostess Brands Inc.’s bread business.
The “delayed-draw” term loan was arranged with the help of Deutsche Bank AG and Bank of America Corp., Flowers Foods said today in a statement distributed by PR Newswire. The company also amended its $500 million revolving credit line and existing unsecured term debt to loosen leverage ratios and get “more favorable” covenants.
Flowers, based in Thomasville, Georgia, agreed to pay $360 million for Hostess’s Wonder, Butternut, Home Pride, Merita and Nature’s Pride brands, 20 bread plants, 38 depots and other assets.
“The regulatory review of the proposed acquisition is under way,” R. Steve Kinsey, chief financial officer of Flowers, said in the statement. “The new term loan balances near-term and longer-term debt, and will allow us to delever in keeping with our long-term financial objectives.”
The company operates 44 bakeries, generating $3.05 billion in revenues last year, according to the statement.