Edita has owned these snack cake brands in Egypt, Libya, Jordan and Palestine since April 2013. Now, following a new deal with Hostess Brands, Edita’s ownership of the labels has been extended to Morocco, Algeria, Tunisia, Syria, Lebanon, Iraq, Bahrain, Oman, the UAE, Kuwait, Qatar and Saudi Arabia.
In a second, closely-related transaction, Edita has acquired the license, know-how and technical assistance for 11 other Hostess products. Under this agreement, the company now owns the manufacturing rights but not the trademarks to the brands, as Edita vice president of investor relations and corporate affairs Dina Sonbaty explained.
“We acquired the technical know-how but not the brands, hence we will develop them under our own existing brands or brands that we might create,”she told BakeryandSnacks.
Expanding beyond Egypt
Edita said the two contracts, which totaled $12 million and were signed on April 16, marked “a new and very exciting phase” in the group’s regional expansion strategy.
Last year, Edita derived 94% of its revenue from Egypt and 6% from regional export markets. By securing ownership of the international Hoho’s, Twinkies and Tiger Tail brands in 12 new markets the company said it hoped to grow the contribution of MENA sales and operations to its revenues both via exports and direct entry in key markets.
“We will do this not just through growing our exports, but by seizing opportunities as they present themselves to establish meaningful direct presences on the ground in key target markets across the region,”said Edita chairman and managing director Hani Berzi, in a statement.
Growing core cake offering
The acquisition of manufacturing rights for 11 Hostess products will enable Edita to enlarge its cake portfolio and maintain its market leadership position in Egypt in the cake category.
“The acquisition will allow us to introduce new products to our home market that will sustain our strong momentum in the core cakes segment, with domestic production allowing us to seed future export markets in advance of our direct entry,” said Berzi.
Commenting on the deal with Edita, Bill Toler, president, Hostess Brands, LLC, told this site: "Hostess is pleased to have expanded its relationship with a longtime licensee.”
Founded in 1996 and headquartered in Egypt, Edita manufactures, markets and distributes packaged cakes, croissants, rusks and wafers. Its local brand portfolio includes the Todo, Molto, Bake Rolz, Bake Stix, Freska and MiMix marques. In 2014, the company generated revenues of EGP 1.9 billion ($249m).
Hostess Brands is one of the largest wholesale bakers and distributors of breads and snack cakes in the United States and makes the well-known Twinkies and Ding Dongs snacks. It was brought out of bankruptcy by private equity groups in January 2013.