J.M. Smucker has entered into an agreement to acquire Hostess Brands, maker of the famous American Twinkies, in a deal worth approximately $5.6 billion, including debt. The value of the transaction represents a 22% premium to Hostess' closing stock price on September 8.

The combination of Smucker and Hostess follows a number of other significant transactions in the industry, including Campbell Soup's $2.7 billion acquisition of Sovos Brands and Unilever's purchase of Yasso, a premium frozen yogurt brand in North America. Smucker's offer values Hostess at 17.4 times expected EBITDA this year. By comparison, Mexican company Grupo Bimbo, owner of rival baked goods brands such as Sara Lee and Entenmann's, trades on the exchange at just 8.5 times EV to EBITDA. Smucker itself and snack food maker Kellogg are currently trading at 11 times.

Founded in 1930, Hostess owns some of the most iconic snack brands in the U.S., including Donettes, Ding Dongs, Zingers and the Voortman line of cookies and waffles. The acquisition represents a significant turnaround for Hostess, which faced bankruptcy twice, in 2004 and 2012, due to a combination of heavy debt from its private owners and a failure to launch new products that would appeal to consumers. Entrepreneur Dean Metropoulos and PE firm Apollo Global Management brought Hostess back to the stock market in 2016 through a SPAC backed by PE firm Alec Gores.