The Supply Side: Wal-Mart / retail supplier briefs

• Walmex expands online presence
Walmex recently announced its plans to launch the online site, Walmart.com.mx, in response to the quickly growing e-commerce market in Mexico.

Walmart already operates the URL, but doesn’t sell on the site, instead using it as a marketing tool to display product offerings and promotions. The new e-commerce site will be Walmart’s third in Mexico as the retailer already sells online via Superama.com.mx and Samsclub.com.mx.

The retail giant also operates Walmart.com banners in Brazil and Chile, and has online selling operations in a total of four markets in Latin America, Argentina, Brazil, Chile, and Mexico.

• Twinkies sale to close this week
Hostess Twinkies could be back on retailer shelves by early summer, as the $410 million bid for the snack cake business awaits the sale approval set for Monday, March 19.

C. Dean Metropoulos, founder and chief executive of Metropoulos & Co., will serve as CEO of the Hostess cake business to be acquired by HB Holdings.

The offer from HB Holdings, an affiliate of private equity groups Apollo Global Management and Metropoulos & Co., was the only qualified bid received by the 5 p.m. deadline March 11.

Brands included in the Hostess deal are Twinkies, Mini Muffins, Cup Cakes, Ho Hos, Zingers and Suzy Q’s and more than 300 recipes sold under the brand names.

Five plants to be acquired in the transaction are located in Los Angeles; Columbus, Ga.; Schiller Park, Ill.; Indianapolis; and Emporia, Kan. The deal also includes warehouses in Kansas City, Schiller Park and Los Angeles and office buildings in Kansas City.

• McKee Foods bid for Drake’s brand awaits court approval
The $27.5 million bid put forth by Collegedale, Tenn.-based McKee Foods Corp. in late January for the Drake’s snack cake brand of Hostess Brands will be the bid presented for approval to the U.S. Bankruptcy Court on April 9 after no other qualified bids were received for the assets by the March 12 deadline.

McKee has agreed to pay $27.5 million for the Drake’s brand and certain equipment. Drake’s products include Ring Dings, Yodels, Devil Dogs, Yankee Doodles, Sunny Doodles and Drake’s Coffee Cake.

“We know that Drake’s cakes are unique baked goods that have a loyal following,” said Mike McKee, president and chief executive officer of McKee. “McKee Foods is a family-owned bakery, similar to how Drake’s was established as a family bakery 125 years ago. We have generations of experience in baking, and we will strive to bake the Drake’s cakes, not just for taste and quality, but also to deliver on the memories of the loyal Drake’s fans.”

McKee Foods has a large production facility and sales offices in Northwest Arkansas as a major supplier to Wal-Mart Stores Inc.

• Smithfield Packing to shutter pork plant
The Smithfield Packing Co., a subsidiary of Smithfield Foods, Inc., announced plans to close its Landover bone-in ham plant by early fall.

Production will be integrated to facilities in North Carolina and Kentucky. The closing will affect about 175 employees.

“We deeply regret having to close this facility because we recognize that layoffs and plant closings are difficult for everyone concerned,” said Tim Schellpeper, president of Smithfield Packing. “However, the Landover plant is a facility that no longer meets our ever-changing production needs. We will work diligently to transfer as many employees as possible to our other operations.”

Smithfield is a supplier to Wal-Mart Stores and a competitor to Tyson Foods Inc.

• Target boosts e-commerce with two acquisitions
Target Corp. recently announced agreements to acquire CHEFS Catalog and assets of Cooking.com in two separate transactions. The e-commerce acquisitions are aimed at expanding Target’s presence in the growing cooking and kitchenware market.

Following the closings, the two businesses will be combined to create a new, wholly owned subsidiary of Target. Both brands will continue to operate under their current names. Target believes these transactions present a strategic growth opportunity; however, there will not be any meaningful financial impact to Target’s 2013 results.

“We are excited to bring CHEFS and Cooking.com into the Target family,” said Casey Carl, president of Multichannel and senior vice president, Enterprise Strategy, Target.

“We know consumers are increasingly looking online for cooking solutions to make their lives easier – from utensils and cookware, to recipes. These strategic transactions provide us a great way to address this growing opportunity and will offer expanded online options for our guests,” Carl noted in the release.

Tim Littleton, CEO of CHEFS, will be president of the wholly owned subsidiary and will report to Carl. Tracy Randall, CEO and co-founder of Cooking.com, will become a consultant to Target.

Both transactions are expected to close within 30 days. Financial terms are not being disclosed.