[Stay on top of transportation news: Get TTNews in your inbox.]
Utz to go private in $2.9 billion deal with Intersnack
European snacking powerhouse gets first foothold in the U.S. market
(Utz Snacks via Facebook)
Key Takeaways:
- Utz Brands agreed to a $2.9 billion deal with Germany’s Intersnack Group, which will acquire all Class A shares and co-own the company.
- The acquisition gives Intersnack its first U.S. market presence, while Utz gains a partner as European snack makers expand in America.
- The transaction is expected to close in the fourth quarter and will be financed through cash, loans and family rollover equity.
Utz Brands Inc. agreed to be taken private in a $2.9 billion deal with Intersnack Group GmbH, giving the European snacking powerhouse its first foothold in the U.S. market.
Intersnack will acquire all of Utz’s Class A shares for $14.25 each, a premium of about 91% from the July 20 closing price. Entities controlled by the Rice and Lissette families will retain half of Utz, with Intersnack holding the other half.
The deal is the latest example of European snack makers looking to the U.S. for growth in packaged food. Last year, Italy’s Ferrero Group, the family-run maker of Nutella, purchased cereal maker WK Kellogg Co., broadening its reach to include iconic cereal brands like Frosted Flakes and Froot Loops. Earlier this year, French dairy company Bel Group announced the acquisition of Ingenuity Foods.
Utz, based in Hanover, Pa., is known for its pretzels as well as Zapp’s branded snacks and On the Border chips and salsas. The century-old company went public via a special purpose acquisition company in 2020. It recorded $1.44 billion in revenue last year, and analysts expect a 4% increase this year.
“Since Utz went public via SPAC, we have consistently viewed management and the board as open to strategic alternatives and focused on maximizing shareholder value through whatever path offered the most attractive returns,” Barclays analyst Andrew Lazar wrote in a research note. “The more surprising aspect is not that a deal ultimately occurred, but rather that it took place only after several years of valuation compression.”
Utz shares rose 90% on July 21 to trade near the offer price. The stock had tumbled over the past couple of years amid concerns about pricing and waning demand in the salty snack category. The shares were trading above $14 a year ago.
Intersnack, based in Dusseldorf, Germany, has a history of buying local brands and scaling them. The company turned itself into a major snacking giant in Europe and Australia through acquisitions, including the French chip brand Vico in the late 1990s and well known U.K. brands such as McCoy’s in 2012. It has also added healthier snack brands including the German Ültje nut brand. The company says it generated 4.5 billion euros ($5.1 billion) in sales last year.
Alex Fraser of Cox Fleet discusses how fleets should respond as roadside breakdowns test their safety, compliance and customer service systems all at once. Tune in above or by going to RoadSigns.ttnews.com.
Utz will be Intersnack’s first foray into what Executive Chairman Johan van Winkel referred to as “the large and attractive U.S. snacking market.” Intersnack has long admired Utz’s history and its brands, the company said in a statement.
The deal, which is expected to close in the fourth quarter, will be financed by $920 million in cash from Intersnack as well as a $1.1 billion term loan facility and borrowings under a $250 million asset-based lending facility. The Rice and Lissette families are also using rollover equity and proceeds from a $44 million tax-related settlement.
Utz Quality Foods/Golden Flake Snack Foods ranks No. 32 on the Transport Topics list of top food service carriers.
