Hostess Brands — Gores Holdings — SPAC Merger (July 2016)
32 slides from Hostess Brands's SPAC merger presentation, Jul 5, 2016
Slide 1: The Original Gores Holdings—Hostess Transaction Announcement
Exhibit 99.2 THE ORIGINAL GORES HOLDINGS—HOSTESS TRANSACTION ANNOUNCEMENT July 2016 GORES HOLDINGS
Slide 2: Disclaimer
PAGE any Agreement various Any 2017. their projections that information the those prospective Forward “target,” forward Such and of termination failure conditions risk operations affected combined (7) Factors” Securities acommitment Industry from such about as Use Investor certain EBITDA. results me
Slide 3: Presenters
2 PAGE HServed ® Metropoulos throughout revenues, enhancing AdvancePierre experience consumer growth, Dean PRESENTERS Bill President Executive an private macroeconomic Holdings investment responsible operations turnaround, “investments portfolio Alec Group Mark Sponsor Executive Founder Strong Presi
Slide 4: Gores Holdings: Premier Sponsorship from Long-Term Investors
3 PAGE ®Thought Group, operational financial, credit management cycles The “Dean the LONG-TERM INVESTORS Gores Since Management Leading Opportunistic, Representative History most Gores Metropoulos: and and a1987, Holdings, well global of investment global real leader capital Group investing value kn
Slide 5: Hostess: The Opportunity
4 PAGE 1.ostess Create 2. Growth 100-year Nearly 3. Momentum Brand 4. Free 5. Liabilities Profile to 6. Tenured Team H ® OSTESS—THE Attractive Snacking Iconic Strong Clean Experienced Peers ofDriving Relaunch Tailwinds Relative Legacy is Management Asset Brands History Market a Since Trends $1bn Mar
Slide 6: I. Business Overview
|. BUSINESS OVERVIEW Goris HoLpincs
Slide 7: Compelling Investment Themes
6 PAGE KAggressive ® enabled highly providing Innovation ESL In-Store “Recent Growth—Sustaining Adj. 85%+ Clean Hostess upside 1 The Hostess Strong Best-in-class EYplatform EBITDA INVESTMENT growth balance Adj. analytical potential acquisition by is Defined Bakery, customer business retailers aand E
Slide 8: Compelling Growth Story and Additional Growth Opportunities
7 PAGE ®Additional growth ~71% 52 driving innovation recapture (stores Foodservice Frozen opportunities developed M&A Compelling expansion COMPELLING story history awareness SBG today invested operations systems in Autobake IT distribution 65 capabilities merchandizing employee “product economics wi
Slide 9: Brand Strength Driving Growth
8 PAGE $ ® 8% (8%) $4.88 $4.47 $4.41 $3.10 since 11% 18% 20% FY14 31% 17% BRAND Special U.S. “Indulgent Strong awareness Brand history year 96 Despite Leading during Recent Premium continues premium 82% $3.65 Avg. SBG label Private 42.68 old consumers 12% 21% relaunch Category category Hostess 29% 7
Slide 10: Asset-Light, Lean Operating Base
CApproximately ® 9 PAGE OldCo1 Financial Bakeries Products “legacy” footprint Transportation Company Workforce Distribution ?retailers swell 1 2 Annual Acquired Apollo LEAN Transportation Third T&D Negative Direct-to-Store-Distribution 5,500+ Reach 11 54% $9.38 150 26-day 600 2015A ~29% Direct-to-Wa
Slide 11: Asset-Light Logistics Approach
AAmericold ® 10 PAGE Transportation: “owned” all Warehousing: partners. o Shorewood SSET-LIGHT Training 100% Completion Reporting-both Route Freight Supply Our Shorewood: XPO Hostess Carthage: rates two Logistics of with scheduling transportation chain bill partners owns Brands distribution for all
Slide 12: Transformed Business Since the Relaunch
$502 ® 11 PAGE LTM $621 $555 SINCE ~16% ~34% Extended 26 65 OldCo …while About Much A 13% Not 10% nearly Over 9% Transformed Transportation Consistently $119 Hostess First revenue after Note: 1 little +11% 2 days quite relaunch 4million 90% Q2’14 Hostess better as the quarters differences 2015A +12%
Slide 13: Strong Snacking Category Trends
THE-‘14 ® 12 PAGE FUNDAMENTAL Source: Taste Expected 26% breakfast between 91% consumption Expandable want taste Sales 6.6% 2014—2019E 5.9% 2009—2014 cakes, Snacking foods—snacks ‘09 Packaged 2.0% 3.6% Food they of SNACKING snacks and CAGR pies, consumers Nielsen, CAGR 2012 foods growth is enjoyment
Slide 14: Hostess Products Address the Entire Sweet Baked Goods Category
Note: ® 13 PAGE the Source: HOSTESS ENTIRE Sweet Snack $1,525MM Donuts Pies, $1,700MM & Danish, Cookies SBG $800MM $490MM $1,380MM Danish pastries, Breakfast Brownies, Blondies, $375MM $500MM Buns, Mini Rolls Ding CupCakes, Zingers®, Twinkies®, Donettes Muffins Jumbo Ho Fruit Representative where Su
Slide 15: Hostess Brand Driving Category Growth
HOSTESS ® 14 PAGE Hostess C-store ~6% gain to 2H13 Drug Dollar Bon Grocery Notes: 25% 2% 29% 6% 7% 11% 49% 8% 9% 16% 40% 14% 54% 20% 4% 5% 10% 18% 21% 22% Other PL 1 2 Nielsen OldCo Appetit share gap Walmart Current Hostess $Nielsen U.S. share BRAND OldCo total data ofU.S. SBG universe, does IStotal
Slide 16: II. Projections and Growth Overview
® II. PROJECTIONS AND GROWTH OVERVIEW 15 PAGE
Slide 17: Significant Meaningful Growth Since Relaunch with Upside Potential
27.0% ® 16 PAGE 30.8% 31.3% 29.4% $781 $722 $654 $582 $42 $39 $33 $27 $738 $684 $621 $555 SIGNIFICANT MEANINGFUL Adj. Net ($ Total (PF $199 26.1% Note: Cake not 1 Hostess +8% +11% +12% Gross Margin $306 $265 $234 $339 $317 $272 $239 $13 $11 $5 $214 $182 $150 2014A $235 $220 $186 $152 $8 $7 $4 $2Adju
Slide 18: Strong Drivers of Margins
SUSTAINABILITY ® 17 PAGE Strong leading could profit Pricing ~$25m impact)1 Less Significant “Manufacturing SG&A Driver Distribution 1 As Additional No Hostess $130 Cost SG&A ~40% Remaining Normalization athan material and only category per Commentary margin million and of brand offunctions 80% is a
Slide 19: Low Capex Plan with Productivity Opportunities
LOW ® 18 PAGE DRIVE Actual Startup expenditures 1 2 $9 $8 $7 $3 $13 $24 $6 $19 $22 MAINTENANCE and support). As Capex2: PRODUCTIVITY Excludes opportunities investment capability payback Productivity 2013A $31 $45 $26 $57 $41 $5 $2 Maintenance Startup Hostess 2014Aestimated periods capex moves and on
Slide 20: Opportunities for the Future
OThe ® 19 PAGE platforms Existing Whitespace—Dollar SKU Marshmallow Seasonal New In-store then Foodservice—New Twinkies, Club—New retailers, Acquisition ?Acquisitions Rich Great Notes: Hostess PPORTUNITIES develop products—Mars platforms pipeline development—exclusives Foundation Company’s Mars Bake
Slide 21: Broad Channel Development
Sales ® 20 PAGE Channel Mass Grocery 99% 100% 92% % (i.e., 2% 6% 21% sales Key Club General) Dollar BROAD Other Total 77% 71% & C-Store o Source: 33% 1 Expansion Permanent PDQ Single New Seasonal Development Back-To-School Mandatory Expand Oxxo Continued Sysco Branded Hostess Bread Shipper Drug1 FY1
Slide 22: III. Product Pipeline Overview
® III. PRODUCT PIPELINE OVERVIEW 21 PAGE
Slide 23: 2015 New Product Launches
2015 ® 22 PAGE Familiar Modern $ already Jumbo business Adjacency to gap Glazed Launched extend Red lineup New Transitioned item Birthday Premium Precedent flavor Line Fastest muffin White Honeybun Targeted and/or /fill Store in Velvet per extensions extension category flavor NEW an innovation & por
Slide 24: 2016 New Product Launches
2016Return ® 23 PAGE The Premium New Twinkies Muffins Notes: & NEW M&M’s Improved Innovation Seasonal PRODUCT of Suzy andMini Milky Q Brownie LAUNCHES Way are Innovation registered trademarks of Mars, Incorporated. Ghostbusters is a registered trademark of Columbia Pictures Industries, Inc.
Slide 25: Why ESL Bread Is Compelling
ESL ® 24 PAGE Why Distributor space compete retailers drives stores brand out-of-stocks Frozen ESL formula blended “developed shelf customers, Size cakes National business expansion Customer 1,797 342 Convenience 50 800 3,553 First Walgreens—launched Annual Hostess format Drug $43 $14 $240 $53 Bread
Slide 26: IV. Transaction Summary and Timeline
® IV. TRANSACTION SUMMARY AND TIMELINE 25 PAGE
Slide 27: Illustrative Pro-forma Transaction
Pro-forma ® 26 PAGE transaction 2016E 2017E Net ILLUSTRATIVE Pro-forma Illustrative o ($ 1 2 3 (including cancel 4 5 Additional Assumes Existing C. Completion Expected Cash Pro-forma indebt Dean millions, millions) equity illustrative up Adj. consideration Metropoulos Sources contribution $300 Uses
Slide 28: Valuation Benchmarking to Peers
9.7x growth ® 27 PAGE 11.8x 13.1x 15.7x 12.6x 13.5x 16.0x 17.9x 9.7x Median 10.4x 11.3x VALUATION Pro-forma Gores’ High 3 11.6x 12.3x Source: Notes: 1 2 3 10.7x 14.2x 17.8x 10.4x 13.1x 14.1x 16.3x 19.1x 10.1x Median acquisition =Represents 14.4x firm food BENCHMARKING Estimates Company Hostess 14.3x
Slide 29: Attractive Margin Profile Relative to Peers
ATTRACTIVE ® 28 PAGE 2016E Hostess’ High 3 growth Source: Notes: 1 2 given 3 Adj. FCF 2competitively Represents 69.0% 13.6% 30.5% 13.1% 37.9% 22.5% 17.7% 20.3% 10.3% 86.8% 92.8% 75.3% 79.4% 99.5% 45.7% MedianuptickEBITDA Conversion1 =Given 13.6% 12.1% 22.4% 17.6% 84.8% 90.5% food Estimates Company F
Slide 30: Anticipated Transaction Timeline
ANTICIPATED ® PAGE Date 29 oTransaction July August Early Late Notes: oPreliminary September Event July September Estimated oSet oBusiness record announced oHold TRANSACTION oMail timeline proxy date combination shareholder final for materials based shareholder proxy onfiled agreement TIMELINE vote
Slide 31: Hostess Non-GAAP Reconciliation
HOSTESS ® PAGE 30 31-Dec-17 31-Dec-16 Ending (Estimated) Twelve 31-Dec-15 Net 31-Dec-14 Ended Plus Interest Depreciation Related Unit-based Bakery Other Impairment Loss Special Distributions Adjusted 1 during quarter 2 year December 3 $12.0 our of 4 efforts Notes: (in The During 2016 For aproceeds m
Slide 32: Glossary
GLOSSARY ® 31 PAGE Term 3PL ACV C-store DSD DTW ERP ESL ISB KPI PDQ SBG SKU STO T&D TMS In-store Key Third-party Extended Enterprise Ship Sweet Direct-to-store Pre-assembled Stock Transportation All-commodity Definition Direct-to-warehouse Convenience performance tokeeping baked bakery order shelf r