Hostess Brands, the maker of Hostess Twinkies, Ding Dongs and CupCakes, entered into a definitive agreement with Gores Holdings, a special purpose acquisition company sponsored by an affiliate of The Gores Group.

This transaction will introduce Hostess as a publicly listed company, with an anticipated initial enterprise value of approximately $2.3 billion or 10.4x the company’s estimated 2016 adjusted EBITDA of approximately $220 million.

Along with the $375 million of cash held in Gores Holdings’ trust account, additional investors have committed to participate via $350 million private placement, led by Alec Gores, chairman and CEO of The Gores Group, and comprising large institutional investors, C. Dean Metropoulos (via $50 million of additional rollover contribution), and Gores affiliates.

Funds managed by affiliates of Apollo Global Management and C. Dean Metropoulos and family, the current majority owners of Hostess, expect to hold an approximately 42% combined stake in Gores Holdings upon completion of the transaction. Dean Metropoulos and William Toler will continue to lead the company as executive chairman and chief executive officer, respectively. This transaction better enables Hostess to continue executing on its long-term growth plan by providing greater access to capital to fund future innovation and acquisitions.

The transaction has been unanimously approved by the boards of directors of both Gores Holdings and Hostess, and is expected to close in Q3/16, subject to the receipt of regulatory approval, and approval of the stockholders of Gores Holdings. Upon closing of the transaction, the name of the company will be changed to Hostess Brands.

Deutsche Bank Securities acted as lead capital markets advisor, along with Moelis & Company and Morgan Stanley, and financial advisor and Weil, Gotshal & Manges acted as legal advisor to Gores Holdings. Rothschild & Co., Credit Suisse and Perella Weinberg Partners acted as M&A advisors to Hostess. Morgan, Lewis & Bockius acted as legal advisor to Apollo. Paul, Weiss, Rifkind, Wharton & Garrison acted as legal advisor and UBS acted as financial advisor to C. Dean Metropoulos and his family.

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