McKee's is ‘stalking horse bidder’ for Drake's snack cake brand

COLLEGEDALE, Tenn. - Hostess Brands, Inc., announced Monday that it has selected McKee Foods Corporation as the stalking horse bidder for its Drake’s snack cake brand and certain equipment.

As stalking horse bidder, McKee Foods sets the bar for bidding in a future auction process to be set by the bankruptcy court. Other interested parties will be able to bid at that time, but their bids would have to exceed the one made by McKee Foods.

Under the stalking horse agreement, McKee Foods Corporation has agreed to pay $27.5 million for the Drake’s brand and specific equipment.

Drake’s products include Ring Dings, Yodels, Devil Dogs, Yankee Doodles, Sunny Doodles and Drake’s Coffee Cake.

“This represents an opportunity for McKee Foods to complement our product line in a very competitive snack cake industry,” said Mike McKee, president and CEO of McKee Foods. “The Drake’s brand has its roots in a family baking business, much like McKee Foods and the Little Debbie brand. We believe that Drake’s will have a strong future within our family of brands.”

Hostess selected the McKee Foods Corporation bid after Perella Weinberg Partners, Hostess's financial advisor, conducted a bidding process that involved contacting 171 potentially interested parties, 88 of which signed confidentiality agreements.

News, Pages 3 on 01/30/2013