Interstate Bakeries Corp

Old HB, Inc.

Company type	Private (post-bankruptcy)
Industry	Bakery, Food processing
Predecessor	Interstate Bakeries Corporation
Founded	1930
Defunct	2012
Fate	Liquidated; assets sold to new Hostess Brands
Headquarters	Irving, Texas , United States
Area served	United States
Key people	Gregory F. Rayburn (last CEO)
Products	Hostess snack cakes, Wonder Bread, Nature's Pride, Dolly Madison, Butternut Breads, Drake's
Number of employees	18,500 (at liquidation)

Old HB, Inc., which operated under the name Hostess Brands between 2009 and 2013 and was originally established in 1930 as Interstate Bakeries Corporation, stood as a leading wholesale bakery and distributor across the United States. Prior to its liquidation in 2012, the company managed prominent brands including Hostess, Wonder Bread, Nature's Pride, Dolly Madison, Butternut Breads, and Drake's.

Initially based at 12 East Armour Boulevard in Kansas City, Missouri, the firm adopted the Hostess Brands name in 2009 following its emergence from bankruptcy proceedings initiated in 2004, simultaneously relocating its headquarters to Irving, Texas. The company filed for bankruptcy protection once more in January 2012.

On November 16, 2012, Old HB submitted filings to cease operations and liquidate its assets. The court granted approval for both the shutdown and asset disposition on November 21, 2012. Subsequently, the Hostess and Dolly Madison brand portfolios were acquired by a new corporation named Hostess Brands, which was later purchased by The J.M. Smucker Company in 2023.

Interstate Bakeries Corporation and Interstate Brands

The enterprise traces its roots back to Nafziger Bakeries, founded by Ralph Leroy Nafziger in Kansas City in 1905. Nafziger expanded his business through acquisitions and sold Nafziger Bakeries to Purity Bakeries (which later became American Bakeries) in 1925, while simultaneously gaining control over the Schulze Baking Company, known for its Butternut Breads brand.

In 1930, Nafziger established Interstate Bakeries Corporation (IBC) by merging Schulze Bakery with seven bakeries from Western Bakeries of Los Angeles, positioning the company as the fifth-largest baker in the U.S. The firm promoted Butternut bread featuring its signature gingham-patterned packaging.

Although Schulze and Western continued operating independently under the Interstate umbrella until 1937, they fully merged with IBC that year. Subsequent acquisitions included Supreme Baking Company in 1943 and O'Rourke Baking Company in 1950. During the 1950s and early 1960s, IBC expanded further by purchasing Ambrosia, Remar, Butter Cream, Campbell-Sell, Schall Tasty, Kingston Cake, Cobb's Sunlit bakeries, Sweetheart Bread Company, and Hart's Bakeries. In the late 1960s, additions such as Millbrook Bread, Shawano Farms, and affiliated canning businesses were incorporated.

In 1969, IBC rebranded itself as Interstate Brands to highlight its principal product lines: Butternut and Blue Seal breads along with Dolly Madison cakes; notably, Butternut Breads had been part of the company's offerings since 1902.

Data Processing Financial (DPF) Acquisition (1975)

In 1975, Interstate was acquired by Data Processing Financial and General Corporation (DPF), a computer-leasing company that faced challenges due to IBM antitrust rulings impacting hardware pricing structures. Seeking to pivot its business focus away from technology leasing, DPF invested its capital into acquiring a manufacturing-oriented company. The combined organization maintained the DPF name with headquarters located in Hartsdale, New York, divesting remaining technology assets while investing heavily in production capabilities. Growth continued through acquisitions including Silver Loaf Baking Company, Eddy Bakeries, and Mrs. Cubbison's Foods.

Interstate Bakeries and IBC Holdings

By 1981, DPF divested its last computer system assets and reverted to the Interstate Bakeries name, moving its headquarters back to Kansas City. From 1986 to 1987, Interstate pursued growth through acquisitions, including Purity Baking Company, Stewart Sandwiches, and Landshire Food Products. In 1988, the company transitioned to private ownership as IBC Holdings and acquired Merita-Cotton's Bakeries from American Bakeries Company. By 1991, IBC had returned to the public market under the Interstate Bakeries banner.

Continental Baking merger (1995)

In January 1995, Interstate completed the purchase of Continental Baking Company from Ralston Purina for $330 million plus 16.9 million shares of stock. Continental had earlier acquired Taggart Bakeries of Indianapolis in 1925, bringing renowned brands such as Wonder Bread and Hostess—established in 1921—into its portfolio. Hostess was known for snack cakes including Twinkies, CupCakes, Ding Dongs, and Ho Hos. The deal also encompassed San Francisco French Bread Company, John J. Nissen Baking Company, Drake's Cakes, and My Bread Company.

Following the merger, Interstate managed two nationwide bread divisions: Butternut and Wonder Bread. These divisions operated under distinctly different management styles—Butternut functioned as decentralized profit centers, whereas Wonder Bread adhered to a more centralized structure—resulting in integration difficulties. Snack cakes offered higher profitability due to scale advantages and streamlined logistics. The rollout of extended-shelf-life enzymes aimed to merge smaller bakeries into larger-scale operations akin to those used for snack cakes; however, these enzymes negatively impacted bread flavor and texture while competitive pressures further squeezed pricing and sales volumes.

Bankruptcy (2004)

On September 22, 2004, Interstate Bakeries filed for Chapter 11 bankruptcy, marking what was then the longest bankruptcy case in U.S. history. Tony Alvarez was appointed CEO to steer the restructuring process. The company’s stock price dropped dramatically from $34 to $2.05 per share amid financial struggles. During bankruptcy proceedings, Interstate declined acquisition offers from Grupo Bimbo and Ron Burkle’s Yucaipa Companies.

Under CEO Craig Jung’s leadership, Interstate Bakeries reemerged as a private entity on February 3, 2009, following a reorganization plan that granted Ripplewood Holdings a 50% equity stake and secured financing from GE Capital, Silver Point Finance, and Monarch Master Funding. Unionized workers agreed to contract concessions in return for equity participation.

Between 2004 and 2009, the company shuttered nine of its 54 bakeries along with over 300 retail locations, cutting its workforce from 32,000 employees down to 22,000. Several regional brands were discontinued and contracts such as producing Sunbeam Bread for the Northeast were terminated.

Hostess Brands (2009)

On November 2, 2009, Interstate Bakeries Corporation adopted the new name Hostess Brands, reflecting its prominent Twinkies and cupcakes product line. The company continued offering core products like Wonder Bread. Subsidiaries including Interstate Brands Corporation and IBC Sales Corporation maintained their branding on Hostess items to support market recognition during the post-bankruptcy transition.

Bankruptcy and liquidation

In December 2011, Hostess Brands encountered a second bankruptcy event, which resulted in the suspension of pension payments and violations of union agreements. The workforce expressed strong disapproval of management, demanding changes in company leadership. On January 10, 2012, Hostess once again filed for Chapter 11 bankruptcy protection, attributing the decision to burdensome legacy pension commitments and restrictive labor regulations. At that time, the company employed approximately 19,000 workers and carried debt exceeding $860 million, supported by $75 million in debtor-in-possession financing provided by investors such as Monarch Alternative Capital and Silver Point Capital.

By March 2012, CEO Brian Driscoll stepped down and was succeeded by Gregory F. Rayburn, who had served as chief restructuring officer. Labor unions opposed Driscoll’s $1.5 million compensation amid reports of executive pay raises up to 80%. In response, Rayburn temporarily reduced salaries for senior executives to $1 to signal efforts toward cost reduction.

Negotiations with the Teamsters Union were underway by July 2012, focusing on reducing wages and benefits while preserving pension contributions. Despite warnings about potential layoffs under the Worker Adjustment and Retraining Notification Act, Hostess remained committed to emerging from bankruptcy as a sustainable enterprise. In November 2012, following rejection of a contract proposal, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), representing 6,600 employees, initiated a strike.

On November 16, Hostess declared it would cease operations at its plants and lay off the majority of its 18,500 employees to facilitate asset liquidation, including its well-known brands. CEO Rayburn highlighted the intent to sell assets to the highest bidders. The BCTGM criticized the approach, arguing that the failure stemmed from an unsustainable debt load that favored Wall Street investors over the company’s long-term viability.

Interest from prospective buyers appeared rapidly. On November 21, a judge approved Hostess’s plan to close operations and liquidate assets, appointing Rayburn to oversee asset preservation. This plan was finalized by late November 2012. Early in 2013, Hostess established deadlines for employee claims related to unpaid wages and gained court approval for stalking horse bidders.

Several major retailers and food producers—including Walmart, Target, Kroger, Flowers Foods, and Grupo Bimbo—submitted acquisition proposals for Hostess’s snack cake and bread product lines. In January 2013, the company engaged Hilco to manage sales of equipment and real estate assets. Flowers Foods submitted a stalking-horse bid valued at $390 million for six bread brands such as Wonder Bread.

Hostess also solicited bids for its snack cake division; interested parties included Grupo Bimbo; Apollo Global Management in partnership with C. Dean Metropoulos & Company; Hurst Capital; and McKee Foods. Apollo and Metropoulos were ultimately selected as lead bidders with a $410 million offer. Auction deadlines for all brand sales were established for March 2013.

This stage represented a pivotal restructuring initiative centered on liquidating assets and divesting brands as part of Hostess Brands’ strategy to address financial challenges through targeted sales and investor collaborations.

Buyers

On January 28, 2013, United States Bakery emerged as the top bidder for Hostess's Sweetheart, Eddy's, Standish Farms, and Grandma Emilie's brands. Meanwhile, McKee Foods led bidding efforts for the Drake's line of products including Ring Dings, Yodels, and Drake's Devil Dogs. On March 11, Apollo Global Management submitted the only bid of $410 million for Hostess's snack cake business segment encompassing Twinkies. Apollo later took the company public under the name Hostess Brands on the New York Stock Exchange, trading with ticker symbol TWNK.

Hostess Brands, LLC

Hostess Brands resumed operations at its Emporia, Kansas facility on June 6, 2013. Production recommenced in July featuring a more focused selection of products. Rich Seban, the newly appointed president, outlined intentions to develop snacks that cater to changing consumer demands by incorporating gluten-free options, increased fiber content, and reduced sugar and sodium levels.

On September 11, 2023, The J.M. Smucker Company revealed its acquisition of Hostess for $5.6 billion through a combination of cash and stock, thereby broadening its presence in the snack food sector.

Acquired by Apollo and Metropoulos, subsequently J.M. Smucker

In January 2013, a consortium formed by Apollo Global Management and C. Dean Metropoulos and Company emerged as the leading bidder to purchase Dolly Madison along with the Hostess snack brand. Other interested parties included Silver Point Capital, Grupo Bimbo, and Hurst Capital. The acquisition was finalized on March 12 when Apollo and Metropoulos secured ownership for $410 million following bankruptcy court approval. C. Dean Metropoulos and Company announced plans for Hostess products to be back on retail shelves by July 15. This business unit later became publicly traded as the second iteration of Hostess Brands and was slated for acquisition by J.M. Smucker as of September 11, 2023.

Acquired by Bimbo Bakeries USA

On February 28, 2013, Bimbo Bakeries USA outbid Flowers Foods for the rights to Beefsteak bread, with bankruptcy court sanction granted on March 20. Later in August, Bimbo purchased trademarks belonging to J. J. Nissen along with its associated website domain and subsequently acquired additional regional bread brands formerly under Hostess such as Colombo, Cotton's, Emperor Norton, Fisherman's Wharf, Parisian, and Toscana.

Acquired by Flowers Foods

In January 2013, Flowers Foods submitted a $360 million bid to acquire six bread brands from Hostess, including Wonder Bread. The transaction encompassed ownership of 20 bakeries and 38 distribution centers. Flowers Foods secured five out of six brands (excluding Beefsteak which went to Grupo Bimbo) on February 28. The bankruptcy court approved the purchase in March and the deal closed on July 22, 2013. The acquired portfolio included Butternut Bread, Home Pride, Merita Breads, Nature's Pride, and Wonder Bread.

Acquired by Lewis Brothers Bakeries

In December 2013, Lewis Brothers Bakeries obtained rights to multiple Hostess brands such as Blue Ribbon, Braun's, Bread du Jour, Continental, Countess, County Fair, D'Agostino's, Daffodil Farm, Di Carlo, Millbrook, Nancy Martin, Old World, Ozark Mill, Pantry Pride, Sap's, and Weber's.

Acquired by McKee Foods

McKee Foods, which owns rival brand Little Debbie, purchased Drake's snack cake line on March 14, 2013 for $27.5 million. Following bankruptcy court approval, McKee reintroduced Drake's products to the market on September 23.

Acquired by United States Bakery

United States Bakery bought four northwestern bakeries from Hostess on March 15, 2013 for $30.85 million; this acquisition received bankruptcy court approval within the same month. The brands included Eddy's, Grandma Emile's, Standish Farms, and Sweetheart Bakery. As of December 2015, the Baker's Inn and Dutch Hearth brand rights had not yet been sold.

See also

• Vachon Inc. and George Weston Limited, licensees of certain Hostess brand products within the Canadian market

External links

• —Official site of the current Hostess Brands corporation
• —Correspondence and frequently asked questions regarding the original Hostess Brands company