Snacks maker Utz Brands to be taken private in $2.9 billion deal
Utz Brands Acquisition by Intersnack Group
Overview of the Acquisition Deal
July 21 (Reuters) - Utz Brands said on Tuesday it has agreed to be acquired by Germany's Intersnack Group in a deal valued at about $2.9 billion, including debt, that would take the salty snacks maker private and give the European firm a foothold in the U.S. market.
Industry Context and Recent M&A Activity
The deal comes amid a wave of mergers and acquisitions across the consumer goods and health sectors, as companies consolidate to better withstand inflationary pressures, shifting consumer tastes and fierce competition. Earlier this month, U.S. grocer Kroger agreed to acquire regional supermarket chain Giant Eagle in a $1.65 billion deal.
Details of the Intersnack Offer
Intersnack, a private family-founded snack company, said it would buy all outstanding shares of Utz Brands for $14.25 per share in cash, representing a premium of 91.3% to the U.S. company's last closing price.
Market Reaction
Shares of Utz, the maker of Chips & Dips and Zapp’s, were up about 88% at $14.02 in premarket trading.
Ownership Structure Post-Acquisition
Following the deal's completion, Intersnack will own 50% of the company, while the Rice and Lissette family entities, representing descendants of Utz's founding family, will own the rest.
Strategic Rationale
“Our partnership with the Rice and Lissette Family, and commitment to Utz, represents a compelling opportunity for Intersnack to expand our exposure into the large and attractive U.S. snacking market, where we do not currently have a presence,” said Johan van Winkel, executive chairman of Intersnack Group.
Financing and Leadership Changes
Deal Financing Details
Utz said the deal will be financed through about $920 million of cash from Intersnack, a $1.1 billion term loan facility, a $250 million asset-based lending facility, as well as rollover and reinvested equity from the Rice and Lissette family.
Leadership Transition
Dylan Lissette’s New Role
Dylan Lissette will become executive chair of Utz after the deal closes, which is expected in the fourth quarter.
Reporting Credits
(Reporting by Sanskriti Shekhar in Bengaluru; Editing by Anil D'Silva and Jonathan Ananda)
