German Intersnack Acquires US Snack Maker Utz Brands in $2.9 Billion Deal
In a significant move within the global snack food industry, Germany's Intersnack Group has announced its acquisition of American snack producer Utz Brands in a transaction valued at approximately $2.9 billion. This strategic takeover marks Intersnack's entry into the substantial and dynamic US snacking market, aiming to leverage Utz Brands' established presence and diverse product portfolio. The agreement outlines that Utz Brands, currently publicly listed, will transition to private ownership, with its founding families retaining a substantial stake alongside Intersnack.
The deal, announced on July 21, positions the enterprise value of Utz Brands, known for popular lines such as Utz and Boulder Canyon, at around $2.9 billion. The per-share price for this transaction is set at $14.25, representing a notable 91% premium over Utz Brands' closing share price on July 20. Following the completion of this acquisition, the Rice and Lissette families, who founded Utz Brands, will maintain a 50% ownership stake, with Intersnack holding the remaining half.
Intersnack, a privately-owned family business itself, reported sales of approximately $5 billion last year and operates in 31 countries across Europe, Asia, Australia, and New Zealand. Its extensive brand portfolio includes well-known names like Tyrrells, Tayto, Whole Earth, and Hula Hoops. Johan van Winkel, Executive Chairman of Intersnack, expressed enthusiasm for the partnership, highlighting the opportunity to expand into the attractive US market where Intersnack currently lacks a direct presence. He emphasized a shared vision with the Utz families and management to build upon Utz's strong foundation and contribute to the future of snacking in North America.
Utz Brands CEO Howard Friedman echoed this sentiment, praising Intersnack's profound understanding of the snacking landscape, their proven track record in nurturing distinctive brands, and their strength in innovation. Friedman noted that Intersnack's marketing, manufacturing, and technological capabilities would be invaluable as Utz continues to invest in its brands and accelerate its strategic growth.
The transaction is slated to conclude in the fourth quarter, pending the necessary regulatory approvals. Intersnack has also indicated that due to the ongoing acquisition process, Utz Brands will forgo its usual earnings conference call, presentation, or prepared remarks when it reports its second-quarter results on August 5. The financing for this acquisition will come from a combination of approximately $920 million in cash, $1.1 billion from a new loan facility, and an additional $250 million from an asset-based lending package. The Rice and Lissette families' contribution will involve rollover equity and a reinvestment from the proceeds of a $44 million tax receivable agreement settlement related to the transaction.
This acquisition signals a strategic growth phase for Intersnack, broadening its global footprint and enhancing its position in the competitive snack food market. By integrating Utz Brands, Intersnack aims to capitalize on new market opportunities and further innovate within the snacking sector, promising an exciting future for both entities.
