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Acquisition | 12 Months Ended
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Apr. 30, 2025
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
Acquisition | On November 7, 2023, we completed a cash and stock transaction to acquire Hostess Brands. The total purchase consideration in connection with the acquisition was $5.4 billion, which reflects an exchange offer of all outstanding shares of Hostess Brands common stock at a price of $34.25 per share, consisting of $30.00 in cash and 0.03002 shares of our common shares, based on the closing stock price on September 8, 2023, that were exchanged for each share of Hostess Brands common stock as of the transaction date. The purchase price included the issuance of approximately 4.0 million of our common shares to Hostess Brands’ shareholders, valued at $450.2, as discussed in Note 17: Common Shares. In addition, we paid $3.9 billion in cash, net of cash acquired, and assumed $991.0 of debt from Hostess Brands and $67.8 of an other debt-like item, reflecting consideration transferred for the cash payment of Hostess Brands’ employee equity awards. New debt of $5.0 billion was borrowed, consisting of $3.5 billion in Senior Notes, an $800.0 Term Loan, and $700.0 of short-term borrowings under our commercial paper program to partially fund the transaction and pay off the debt assumed as part of the acquisition. For additional information on the financing associated with this transaction, refer to Note 8: Debt and Financing Arrangements. Hostess Brands is a manufacturer and marketer of sweet baked goods brands including Hostess Donettes, Twinkies, CupCakes, DingDongs, Zingers, CoffeeCakes, HoHos, Mini Muffins, and Fruit Pies, and the Voortman cookie brand at the acquisition date. In addition to its headquarters in Lenexa, Kansas, the transaction included six manufacturing facilities located in Emporia, Kansas; Burlington, Ontario; Chicago, Illinois; Columbus, Georgia; Indianapolis, Indiana; and Arkadelphia, Arkansas, a distribution facility in Edgerton, Kansas, and a commercial center of excellence in Chicago, Illinois. Approximately 3,000 employees transitioned with the business at the close of the transaction. The transaction was accounted for under the acquisition method of accounting, and accordingly, the results of Hostess Brands operations, including net sales and an operating loss of $1,178.8 and $2,162.3, respectively, are included within the Sweet Baked Snacks segment for 2025. The operating loss for the year ended April 30, 2025, includes $1,661.6 of pre-tax impairment charges related to the goodwill of the Sweet Baked Snacks reporting unit, $320.9 of pre-tax impairment charges related to the Hostess brand indefinite-lived trademark, a $44.2 pre-tax loss on the disposal of certain Sweet Baked Snacks value brands, a $265.9 pre-tax loss on the disposal of the Voortman business, and excludes special project costs related to transaction and integration costs recognized within the segment. The final purchase price was allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. We determined the estimated fair values based on independent appraisals, discounted cash flow analyses, quoted market prices, and estimates made by management. The purchase price exceeded the estimated fair value of the net identifiable tangible and intangible assets acquired and, as such, the excess was allocated to goodwill. The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date.
Assets acquired: |
Cash and cash equivalents | $ | 135.0 |
Trade receivables – net | 181.1 |
Inventories | 66.0 |
Other current assets | 6.0 |
Property, plant, and equipment – net | 534.5 |
Operating lease right-of-use assets | 17.2 |
Goodwill | 2,446.8 |
Other intangible assets – net | 3,038.6 |
Other noncurrent assets | 43.2 |
Total assets acquired | $ | 6,468.4 |
Liabilities assumed: |
Accounts payable | $ | 67.3 |
Other current liabilities | 249.0 |
Deferred income taxes | 639.4 |
Noncurrent operating lease liabilities | 14.5 |
Other noncurrent liabilities | 1.4 |
Total liabilities assumed | 971.6 |
Net assets acquired | $ | 5,496.8 |
As a result of the acquisition, we recognized a total of $2.4 billion of goodwill within the Sweet Baked Snacks segment. Of the total goodwill, $196.6 was deductible for tax purposes at the acquisition date, of which $164.8 remains deductible as of April 30, 2025. The goodwill recognized at acquisition represented the value we expected to achieve through the implementation of operational synergies and growth opportunities as we integrate Hostess Brands into our Company. During 2025, we recognized total pre-tax impairment charges of $1,982.5, of which $1,661.6 and $320.9 related to the goodwill of the Sweet Baked Snacks reporting unit and the Hostess brand indefinite-lived trademark, respectively. The remaining goodwill and indefinite-lived trademarks resulting from the acquisition remain susceptible to future impairment charges, as the carrying values approximate estimated fair values due to the impairment charges recognized during 2025. Any significant adverse change in our near or long-term projections or macroeconomic conditions may result in future impairment charges. For additional information, refer to Note 7: Goodwill and Other Intangible Assets. The following table summarizes the purchase price allocated to the identifiable intangible assets acquired.
Intangible assets with finite lives: |
Customer and contractual relationships (25-year useful life) | $ | 1,238.5 |
Non-competition agreements (varying useful lives) | 38.0 |
Trademarks (5-year useful life) | 9.9 |
Intangible assets with indefinite lives: |
Trademarks | $ | 1,752.2 |
Total intangible assets | $ | 3,038.6 |
The annual amortization expense for the finite-lived intangible assets based on the purchase price allocation at the acquisition date was $71.6. Hostess Brands’ results of operations are included in our consolidated financial statements from the date of the transaction within our Sweet Baked Snacks segment. If the transaction had occurred on May 1, 2022, unaudited pro forma consolidated results for the year ended April 30, 2024, would have been as follows:
|  |  |  |  | Year Ended April 30, 2024
Net sales |  |  |  |  | $ | 8,912.8 |
Net income (loss) |  |  |  |  | 761.9 |
Net income (loss) per common share – assuming dilution |  |  |  |  | 7.15 |
The unaudited pro forma consolidated results are based on our historical financial statements and those of Hostess Brands and do not necessarily indicate the results of operations that would have resulted had the acquisition been completed at the beginning of the applicable period presented. The most significant pro forma adjustments relate to the elimination of interest expense associated with acquisition-related financing, nonrecurring acquisition-related costs incurred prior to the close of the transaction, amortization of acquired intangible assets, and depreciation of acquired property, plant, and equipment. The unaudited pro forma consolidated results do not give effect to the synergies of the acquisition and are not indicative of the results of operations in future periods

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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