v3.8.0.1

Business Combination (Tables) | 12 Months Ended
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Dec. 31, 2017
Business Combinations [Abstract] |
Consideration Paid | The following summarizes the fair value of the Business Combination:
(In thousands) |
Cash paid | $ | 479,761 |
Equity consideration paid (1) | 239,323 |
Tax receivable arrangement payable | 161,681 |
Total consideration | 880,765 |
Hostess Holdings debt assumed by Gores Holdings, Inc | 1,228,254 |
Noncontrolling interest (2) | 326,601 |
Fair value of the Business Combination | $ | 2,435,620 |
(1) Equity consideration paid to the Legacy Hostess Equityholders is summarized below:
(In thousands, except share data) |  |
Class A common shares of the Company subject to six month sales restriction |  | 22,098,139 |
Fair value per share |  | $ | 10.83 |
|  | $ | 239,323 |
(2) The class B units in Hostess Holdings, LP, which are not owned by the Company, represent the noncontrolling interest as provided below:
(In thousands except share data) |  |
Class B units of Hostess Holdings, LP subject to six month sales restriction |  | 24,424,259 |
Fair value per unit |  | $ | 10.83 |
|  | $ | 264,515 |
(In thousands except share data) |  |
Class B units of Hostess Holdings, LP not subject to sales restrictions |  | 5,446,429 |
Fair value per unit |  | $ | 11.40 |
|  | $ | 62,086 |
The fair value of these units was determined as follows:
Per share price based on average market price on the day of the Business Combination |  | $ | 11.40 |
Discount for lack of marketability |  | 5.0 | %
|  | $ | 10.83 |
The 5% discount for lack of marketability was determined by using an option pricing method (Finnerty Protective Put Model) to reflect a six month sales restriction.
Equity Consideration | The fair value of these units was determined as follows:
Per share price based on average market price on the day of the Business Combination |  | $ | 11.40 |
Discount for lack of marketability |  | 5.0 | %
|  | $ | 10.83 |
Equity consideration paid to the Legacy Hostess Equityholders is summarized below:
(In thousands, except share data) |  |
Class A common shares of the Company subject to six month sales restriction |  | 22,098,139 |
Fair value per share |  | $ | 10.83 |
|  | $ | 239,323 |
Pro Forma Financial Information | The following unaudited pro forma combined financial information presents the Company’s results as though the Business Combination had occurred at January 1, 2016. The unaudited pro forma consolidated financial information has been prepared using the acquisition method of accounting in accordance with U.S. GAAP:
|  | Year Ended December 31, 2016
(In thousands) |  | (Pro Forma)
|  | (Unaudited)
Net Revenue |  | $ | 727,586 |
Net Income |  | 82,442 |
Purchase Price Allocation | The Company recorded an allocation of the purchase price to Predecessor’s tangible and identified intangible assets acquired and liabilities assumed, excluding long-term debt, based on their fair values as of the closing date. The purchase price allocation is as follows:
(In thousands) |  |
Cash |  | $ | 58,519 |
Accounts receivable |  | 58,474 |
Inventories |  | 39,338 |
Prepaids and other assets |  | 2,998 |
Property and equipment |  | 155,076 |
Accounts payable and accrued expenses |  | (56,559 | )
Deferred tax liabilities |  | (352,531 | )
Trade name and trademarks |  | 1,408,848 |
Customer relationships |  | 542,011 |
Goodwill |  | 579,446 |
Total assets acquired and liabilities assumed |  | $ | 2,435,620 |
The acquisition of Superior was treated as a purchase in accordance with ASC 805, Business Combinations, which requires allocation of the purchase price to the estimated fair values of assets and liabilities acquired in the transaction. The allocation of purchase price is considered final. The following is a summary of the allocation of the purchase price:
(In thousands) |  |
Cash |  | $ | 1,009 |
Accounts receivable |  | 2,122 |
Inventories |  | 2,300 |
Prepaids and other current assets |  | 112 |
Property and equipment (1) |  | 7,075 |
Intangible assets (2) |  | 29,370 |
Goodwill (3) |  | 24,227 |
Accounts payable |  | (2,920 | )
Accrued expenses |  | (552 | )
Capital lease obligation |  | (799 | )
Deferred tax liability |  | (10,844 | )
Total assets acquired and liabilities assumed |  | $ | 51,100 |
(1) | Amounts recorded for property and equipment includes land, building, plant machinery and equipment.
(2) | Amounts recorded for intangible assets includes customer relationships, trade names and trademarks.
(3) | Amounts recorded for goodwill are generally not expected to be deductible for tax purposes.

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- Definition Tabular disclosure of the equity interest issued or issuable in a business acquisition (or series of individually immaterial business acquisitions) planned, initiated, or completed during the period. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -Subparagraph (b)(4) -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6927-128479 + Details
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- Definition Tabular disclosure of a material business combination completed during the period, including background, timing, and recognized assets and liabilities. This table does not include leveraged buyouts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=79982066&loc=d3e1486-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=79982066&loc=d3e1392-128463 + Details
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- Definition Tabular disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed. May include but not limited to the following: (a) acquired receivables; (b) contingencies recognized at the acquisition date; and (c) the fair value of noncontrolling interests in the acquiree. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=84161108&loc=d3e4845-128472 + Details
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