Hostess Brands — Gores Holdings — SPAC Merger (September 2016)
26 slides from Hostess Brands's SPAC merger presentation, Sep 14, 2016
Slide 1: Gores Holdings – Hostess Research Analyst Presentation
Exhibit 99.1 Exhibit 99.1 GORES SeptemberHOLDINGS 2016 – HOSTESS RESEARCH ANALYST PRESENTATION
Slide 2: Disclaimer
DISCLAIMER financial presentation The assumptions market future Gores’ inclusion should herein), significant assurance of Forward may “intend,” historical actual could Transaction following announcement competition, proposed uncertainties by looking Industry from internal Hostess’ Use Investor defin
Slide 3: Presenters
PRESENTERS Dean Hostess Executive growing Bill President Former planning Tom EVP Served Corporate finance Gores Alec Chairman Founder, through Mark Sponsor Chief Group’s 2companies PAGEToler Peterson & Gores Metropoulos Stone Executive Holdings as CFO expertise CEO varying investment /revenues, and
Slide 4: Long-Term Investors / Premier Sponsorship
LONG-TERM The INVESTORS Gores Management Dean Thought successfully Leading 3capital PAGE Gores Metropoulos: Holdings, structures global leader Group rebuild team SPONSORSHIP alternative and Inc Representative / has Gores Storied brand some is over sponsored Holdings, revival of investment Investor 8
Slide 5: Agenda
I. BUSINESS AGENDA II. 4III. PAGEPROJECTIONS TRANSACTION OVERVIEW AND SUMMARY GROWTH AND OVERVIEW TIMELINE
Slide 6: I. Business Overview
1. BUSINESS OVERVIEW Gores Howpines cfiostes3)
Slide 7: Key Investment Themes
KEY Shelf-life Warehouse Aggressive Strong The -Best-in-class 61Hostess PAGE Acquisitions: Core: Growth Defined growth INVESTMENT customer Innovation Brand business is–Technology as aSustaining Model capital potential $1bn+ (Adj. financial Recent support transformation: EBITDA and investment brand o
Slide 8: Brand Strength Driving Growth
BRAND Special U.S. “Indulgent year 96 Premium ($ 82% $4.45 SBG $4.41 $2.68 $3.04 Private Leading Hostess Recent 22% Strong (9%) Despite 15.9% 22.3% 2H Market (Nielsen 54321Notes: 7retail PAGE 3/ 13 Nielsen Hostess lb.) history consumers Avg. sales $4.86 $3.66 2014 14.9% Hostess growth 52 label Share
Slide 9: The Fundamental Snacking Category Trends Are Strong
THE FUNDAMENTAL Snacking Dollar 1.7% Packaged Taste 92% Relevance Expandable …and Not A 84321About PAGE Euromonitor Nielson SNAXPO Harman little quite of SNACKING 3.1% and Hostess the % better consumers change is growth /enjoyment 1Perishables Atchison same across not 7.6% In-Store aMillennials repo
Slide 10: Hostess Still Has Significant Headroom for Growth and Share Gains
HOSTESS Hostess ~6% 22% 2016 16% Significant Distribution Custom 91Notes: PAGE Hostess gap OldCo Hostess $SKUs tomarket share STILL Upside Old expansion Seasonal data of Co share, HAS SBG Remains does (more Total category1 SIGNIFICANT flavors not include Nielsen items Display inSuperior. Universe. m
Slide 11: Hostess Has Significant Room for Growth In and Beyond Bakery
HOSTESS IN-STORE FREEZER NEW CLUB TODAY1 IFOOD-SERVICE 1. 1N 2$B 10 PAGE N-AISLE EW Current Estimated $ AISLES FILLINGS FLAVORS FORMS LICENSING sales, WHITE INTERNATIONAL HAS BAKERY based AND 8/13/2016, SIGNIFICANT on SPACE2 CHANNELS2 assumptions AC Nielsen AISLE ROOM of reasonable BFY total FOR uni
Slide 12: Great Opportunities for the Future
OPPORTUNITIES Great New Frozen White International Acquisition Notes: 1Licensing 11 PAGE Mayproducts Foundation Space 2016. Mars Retailof is Club School Food and Superior a registered Culture platforms FOR Service items Cake THE oftrademark Line Growth Products, FUTURE extensions Innovation ofInc.1
Slide 13: Hostess' Two-Pronged Better-for-You Approach
HOSTESS’ Objective: B ® Two-Pronged Removal Phased “cleaner Short-term PHOs” New Today Source: 12 PAGE FY items Strategy –approach Nielsen “0 New label” ofprovide delivering –grams APPROACH Addition Label Mini on panel totrans core better-for-you Muffins simplification of BFY data; fat negatives TOp
Slide 14: II. Projections and Growth Overview
II. PROJECTIONS AND GROWTH OVERVIEW
Slide 15: Significant Growth Since Re-launch
SIGNIFICANT Net +11% $366 $14 $17 $339 Gross 41.0% Margin ($ 11% $2 $98 Adj. ~380 30.9% 2014A 27.0% 29.4% Total (PF Hostess Note: 4321unaudited 14 PAGE Adjusted Gross Hostess Superior in $111 Revenue Superior) $738 $684 $109 EBITDA2 EBITDA increase millions) $332 $317 Margin bps Hostess Profit1 Prof
Slide 16: Strong Momentum Continues
STRONG Net +10% $192 ($ +12% $78 $86 Gross Margin Adj. ~20 Q2 30.9% 31.1% Total (PF Note: Hostess3 4321Superior4 significant on pro acquisition Driven product development continued format increases and dollars, revenue Hostess EBITDA expanded 15 PAGE Adjusted Gross Hostess Superior in a2015 forma Re
Slide 17: Sustainability of Margins
SUSTAINABILITY Driver No Commentary As ~$140 Hostess ~$25m SG&A Third Strong implemented 16 PAGE amaterial category party million Pricing margin and functions of has annual Distribution warehouse achange through 3leader, invested profile Manufacturing bakery fully manufacturing in OF retailers the d
Slide 18: Low Maintenance Capex with Opportunities to Drive Productivity
LOW Actual $57 $8 $41 $7 $31 $6 $26 $3 $22 $19 Startup Productivity 21As 17 PAGE 013A Excludes Startup $45 $6 $24 $3 $2 Hostess $3$3 $24 $19MAINTENANCE and 2014A $9 Capex2: $13 $5 $7 capex $3 estimated acquisition moves and 2015A in one-time capability the focus Capex 2016P Stub and from CAPEX New o
Slide 19: III. Transaction Summary and Timeline
III. TRANSACTION SUMMARY AND TIMELINE
Slide 20: Proposed Transaction Overview
•PROPOSED Pro-forma 2016E 2017E Net ($ Gores Sources Additional Cash Uses Illustrative C. Metropoulos 321Apollo 5.4mm 54additional 19 PAGE Additional Pro-forma Existing C. Completion Assumes Expected Cash Pro-forma Reflects in Dean debt Dean millions, millions) consideration4 illustrative Holdings A
Slide 21: Valuation Benchmarking to Peers
VALUATION 17.9x 13.8x 11.3x 10.4x Pro-forma 9.0x High Median 15.8x 13.2x 10.6x 9.7x Gores’ 8.8x 321Source: 20 PAGE WhiteWave 17.9x 16.6x Hostess 10.1x growth 11.5x 16.5x 13.4x 10.3x 15.9x 12.9x 12.1x acquisition Company = represents 14.6x 13.2x firm 10.0x 15.8x 13.7x 12.9x 11.9x food Foods BENCHMARK
Slide 22: Attractive Margin Profile Relative to Peers
ATTRACTIVE 23.7% 30.5% 32.2% 18.1% 20.5% 13.6% 11.6% 2016E High Median 99.6% 86.8% 81.0% 78.4% Hostess’ 45.7% 69.3% 321Source: 21 PAGE 92.0% FCF Represents Given growth conversion 10.5% Adj. 23.1% 17.5% 13.3% 3 84.5% 80.8% 75.6% FCF Company =lack 90.5% competitively 13.5% 65.1% EBITDA Conversion1 fo
Slide 23: Anticipated Transaction Timeline
ANTICIPATED Date Transaction July Early Mid-Late Early-Mid Notes: 22 PAGE Preliminary Event July September Estimated oBusiness oMail announced HoldTRANSACTION proxy definitive Reply timeline shareholder combination materials to initial based proxy vote on SEC filed agreement materials TIMELINE and c
Slide 24: Hostess Adjusted EBITDA Reconciliation
HOSTESS (in Net Plus Impairment Loss Special Distributions Adjusted Superior Combined Twelve Months (Estimated) Ending 31-Dec-17 50.1 15.3 -0.2 60.1 $8.0 1Notes: 2$7.8 3expenses consisted from pursuit 4irrevocable the million, of 5During 76their 23 PAGE Related 2016 During For Hostess Superior Month
Slide 25: Appendix
24 PAGE APPENDIX
Slide 26: Glossary
Term All-commodity GLOSSARY ACV 25 PAGE Definition volume (%) BFY Better-for-you C-store Convenience store ISB In-store bakery LTO Limited time offer PHO Partially hydrogenated oils SBG Sweet baked goods SKU Stock keeping unit