- Announcing a deal with Gores Holdings Inc., Hostess says the stock offering will put its value at about $2.3 billion, a figure that's 10.4 times the baker's estimated 2016 Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of approximately $220 million.
Yeah, it be some shady shit. I wonder if Hostess could have done this if they had a whole bunch of vendor relationships but it sounds like busting up what vendor relationships they had was part of the misadventure. So now they've got an iconic snack business with none of the overhead of dragging along the relationships that made them iconic. Thing of it is, they're still the ultimate example of junk food in a universe where sugary snacks are the devil. May they burn.
I'd half bet that even if Hostess burned their bridges with their vendors, there'd be others just chomping at the bit for the opportunity to work with them. If they pulled the same stunt twice though, companies would probably smarten up real quick and either demand better pay or a stronger contract. Then again, I hear Wal-Mart has had some success in trapping companies into working with them because even if those companies can't really afford to work with Wal-Mart demanding lower and lower rates from them each year, they really can't afford to suddenly lose such a large customer. I wouldn't put it past the new Hostess to try similar tactics, say for example finding a small time vendor and becoming 80% of their business.
This sounds SOOOoooo familiar. The outfit I work for sends execs through about every 18 months, each one a superstar savior who will make everything alright... until they quietly exit with large severance package and move on to the next gig.Hostess’s failure was compounded by having six CEO’s in 8 years who had no experience in the bread or cake baking industry, and despite their financial woes, the company’s CEO got a 300% salary increase from $750,000 to $2,250,000, and other top executives received raises worth hundreds-of-thousands of dollars