Hostess Brands LLC is in talks to acquire Give and Go Prepare Foods Corp., the Canadian maker of thaw-and-serve sweet baked goodies, people familiar with the matter told Reuters.
The combination of the two companies would provide a confectionary tie up between Hostess Brands' iconic cream-filled Twinkie with Give and Go's popular Canadian Two-Bite Brownie.
One of the people told Reuters that OMERS Private Equity, the buyout arm of the Ontario Municipal Employees Retirement System, is hoping that a deal could value Give and Go as much as $800 million.
OMERS has been exploring a sale or an initial public offering (IPO) for Give and Go.
Reuters adds that the people said, who asked not to be identified because the matter is confidential, Hostess Brands faces competition for Give and Go.
There's no assurance that Hostess Brands' offer will be the one selected.
Business Pundit adds that the acquisition of Give and Go would make sense for Hostess Brands.
The maker of Twinkie has been facing increased competition from Give and Go.
Business Pundit adds that aside from the Two-Bite miniature bake treats and Kimberly's Bakeshoppe cupcakes, Give and Go would also provide a private-label products business.
Give and Go provides private-label products to retailers across Canada, the U.S., Mexico, Europe, Australia and Japan.
Reuters said that Hostess Brands, who is one of the largest wholesale bakers and distributors of bread and snack cakes in the U.S., explored its own sale earlier this year.
The company, though, decided that an IPO would be more lucrative for Hostess Brands.
Reuters adds that Hostess Brands, though, has not yet gone ahead with its plans for an IPO.
The company is owned by Apollo Global Management LLC and C. Dean Metropoulos, a consumer industry investor.
Reuters said that OMERS bought Give and Go in 2007 from Kilmer Capital Partners, a private equity firm.
