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Interstate Bakeries facts for kids

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Old HB, Inc.
Private
Industry Food (bakery)
Fate Bankruptcy
Successor Hostess Brands
Founded 1930 (1930)
Defunct November 21, 2012 (2012-11-21)
Headquarters Irving, Texas, United States
Key people
Gregory F. Rayburn, CEO
Products Brands such as Wonder Bread (US only), Hostess, Nature's Pride, Merita Breads, Home Pride, and Dolly Madison
Revenue $2.8 billion (2008)
$144 million (2008)
Total equity $462 million (2008)

Old HB, Inc. was a big company that made and sold bakery products in the United States. From 2009 to 2013, it was known as Hostess Brands. It started way back in 1930 as the Interstate Bakeries Corporation.

Before it closed down in 2012, the company owned many famous brands. These included Hostess, Wonder Bread, Nature's Pride, Dolly Madison, Butternut Breads, and Drake's.

For many years, the company was called Interstate Bakeries. Its main office was in Kansas City, Missouri. In 2009, after facing money problems, it changed its name to Hostess Brands. The main office then moved to Irving, Texas. Hostess Brands had money troubles again in January 2012.

On November 16, 2012, the company asked a court to let it close its business. It wanted to sell all its brands and other things. On November 21, the court agreed. Today, the Hostess and Dolly Madison brands are made by a new company also called Hostess Brands. This new company is based in Lenexa, Kansas.

History

Interstate-bakeries1
Former headquarters on Armour Boulevard in Kansas City (later the operations center).
InterstateBakeries
Former Interstate Bakeries logo

Early Years and Growth (1930-1970s)

The company's story began with Nafziger Bakeries in Kansas City in 1905. A man named Ralph Leroy Nafziger started it. He grew his bakeries and bought other companies. In 1930, Nafziger created the Interstate Bakeries Corporation (IBC). This company became one of the largest bakers in the U.S.

IBC sold popular breads like Butternut bread. Over the years, IBC bought many other baking companies. In 1969, IBC changed its name to Interstate Brands. Its main products were Butternut and Blue Seal breads, and Dolly Madison cakes.

Changes and New Owners (1975-1991)

In 1975, a company called DPF bought Interstate. DPF was a computer company that wanted to try something new. The combined company kept the DPF name for a while. It bought more bakeries during this time.

In 1981, DPF sold its computer parts and changed its name back to Interstate Bakeries. The main office returned to Kansas City. Interstate kept growing by buying more food companies. In 1988, it became a private company and was called IBC Holdings. Then, in 1991, it became a public company again and went back to the name Interstate Bakeries.

Grumman Kabmaster Hostess truck
Interstate Bakeries Hostess delivery truck

Joining Forces with Continental Baking (1995)

A big change happened in January 1995. Interstate bought the Continental Baking Company. This deal brought famous brands like Wonder Bread and the Hostess brand to Interstate. Hostess had started in 1921 and was known for cakes like Twinkies, CupCakes, Ding Dongs, and Ho Hos.

After this merger, Interstate had two big bread divisions: Butternut and Wonder Bread. The company hoped to make its bread bakeries work like its successful snack cake operations. However, new ways of making bread changed its taste and texture. This led to lower prices and sales.

Facing Money Problems (2004-2009)

On September 22, 2004, Interstate Bakeries had to file for bankruptcy. This means the company needed help from a court because it was having serious money problems. The company's stock price dropped a lot.

During this time, which was one of the longest bankruptcies in U.S. history, Interstate closed many bakeries and stores. Its number of workers also went down. In February 2009, Interstate Bakeries finally came out of bankruptcy. It became a private company again. The workers agreed to some changes in their contracts to help the company.

Becoming Hostess Brands (2009)

On November 2, 2009, Interstate Bakeries changed its name to Hostess Brands. This new name came from its popular cake division, known for Twinkies and cupcakes. Hostess Brands continued to sell its bread lines, including Wonder Bread.

More Money Problems and Closure (2012)

In December 2011, reports said that Hostess Brands was about to file for bankruptcy again. The company stopped paying some benefits to its workers, which broke their agreements. Workers felt the company was not managed well.

On January 10, 2012, Hostess Brands filed for bankruptcy for the second time. The company said it was not doing well because of old pension and health care costs, and strict work rules. Hostess had 19,000 employees and owed over $860 million.

In March, the CEO, Brian Driscoll, left. Gregory F. Rayburn took over. It was found that some top executives had received big pay raises the year before. Rayburn cut the salaries of the top four executives to just $1 for a while.

In November 2012, Hostess employees across the country went on strike. The union, representing 6,600 Hostess workers, took action. They did not agree with the company's new contract offer.

On November 16, Hostess announced it was closing its plants and letting go of most of its 18,500 employees. The company planned to sell off its assets, including its famous brand names. CEO Gregory Rayburn said they would sell everything to the highest bidders. The union said that the company's plan to get out of bankruptcy was not going to work.

On November 21, a judge allowed Hostess to close. The judge kept Rayburn in charge of selling the company's parts. The plan to sell off Hostess Brands was made final on November 29.

Who Bought the Brands?

Many big companies were interested in buying Hostess brands. These included Walmart, Target, Kroger, Flowers Foods, and Grupo Bimbo.

In January 2013, Hostess Brands hired a company to sell its equipment and buildings. Soon after, Flowers Foods offered $390 million for six of Hostess's bread brands, including Wonder Bread.

Hostess also looked for buyers for its snack cakes. Four companies were interested, including Grupo Bimbo and a partnership of Apollo Global Management and C. Dean Metropoulos and Company. Apollo and Metropoulos became the main bidders for the snack cakes.

New Beginnings for Hostess Brands

On June 6, 2013, the new Hostess Brands company reopened a plant in Emporia, Kansas. Production started again the next month. On July 15, Hostess brands were back on store shelves! The new company sells fewer products than before. However, the new president, Rich Seban, said they might create new snacks in the future. He even suggested they might try gluten-free or lower-sugar products.

Brands

Sold to Apollo and Metropoulos

In January 2013, a team from Apollo Global Management and C. Dean Metropoulos and Company became the main bidders. They wanted to buy the Dolly Madison and Hostess snack brands. On March 12, they won the bid for $410 million. A court approved the deal. The new owners announced that Hostess products would be back in stores by July 15.

Sold to Bimbo Bakeries USA

Bimbo Bakeries USA bought the rights to Beefsteak bread on February 28, 2013. The deal was approved by a court in March. Later, Bimbo Bakeries also bought other regional Hostess bread brands. These included Colombo, Cotton's, Emperor Norton, Fisherman's Wharf, Parisian, and Toscana.

Sold to Flowers Foods

In January 2013, Flowers Foods offered to buy six of Hostess's bread brands, including Wonder Bread. This deal was for $360 million and included 20 bakeries. Flowers Foods won the bid for five of these six bread brands (all except Beefsteak). The deal was completed on July 22, 2013. The five brands they bought are Butternut Bread, Home Pride, Merita Breads, Nature's Pride, and Wonder Bread.

Sold to Lewis Brothers Bakeries

The rights to several Hostess brands were sold to Lewis Brothers Bakeries in December 2013:

  • 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
  • Weber's

Sold to McKee Foods

McKee Foods, which owns the Little Debbie snack brand, bought the Drake's snack cakes. This happened on March 14, 2013, for $27.5 million. After a court approved the deal, McKee started selling these snacks on September 23.

Sold to United States Bakery

United States Bakery won the auction for four Hostess bakeries in the northwestern U.S. on March 15, 2013. They paid about $30.85 million. The brands they bought were Eddy's, Grandma Emile's, Standish Farms, and Sweetheart Bakery. As of December 2015, the Baker's Inn and Dutch Hearth brands had not been sold.

See also

Kids robot.svg In Spanish: Old HB para niños

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