The de-SPAC of Hostess Brands Inc. was one of the most successful of the past decade. In 2016, the maker of Twinkies completed a $725 million merger with Gores Holdings Inc., a SPAC formed by Gores Group LLC. Seven years later, Hostess sold to JM Smucker Co. (SJM) for $5.6 billion.

Gores Group senior managing director Mark Stone leads the SPAC effort at the Beverly Hills, Calif.-based private equity sponsor, which has brought 15 SPACs public since 2015, as he discussed on this week’s Drinks With The Deal podcast.

Stone explained how Gores employs SPACs as an alternative investment vehicle. He said the easiest part of the SPAC is raising the IPO. The real work lies in searching out a merger partner, and the process becomes more difficult once the deal is announced and the transaction moves toward closing, he said. Many SPAC sponsors fail to appreciate that, which helps explain why so many de-SPACs have performed poorly.

In Stone’s view, the shakeout in the SPAC market, which has seen almost 250 liquidations in a little over 18 months, was necessary and has been beneficial for companies thinking about going public via de-SPAC and sponsors looking for targets.

Listen to the podcast with Mark Stone below:

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