Utz Brands To Buy Festida Foods In $41 Mln Deal - Quick Facts

(RTTNews) - Utz Brands, Inc. (UTZ), a manufacturer of branded salty snacks, announced Tuesday that its units have entered into a definitive agreement with Great Lakes Festida Holdings, Inc. and related entities to acquire Festida Foods. The total purchase price is $41 million, subject to customary purchase price adjustments.

Under the deal, Utz Brands will acquire all of the assets, including the real estate located in Grand Rapids, MI, related to the operation of Festida Foods.

Utz expects the transaction to be accretive to earnings in 2021 and beyond. The deal is subject to customary closing conditions and is expected to close in the second quarter of 2021.

Festida Foods is a manufacturer of tortilla chips, corn chips, and pellet snacks, and the largest manufacturer of tortilla chips for Utz's ON THE BORDER tortilla chip brand. After eliminating tolling fees between Festida Foods and Utz subsidiaries, Festida generated incremental FY 2020 Net Sales and Adjusted EBITDA of approximately $14 million and $6 million, respectively.

Dylan Lissette, CEO of Utz, said, "We expect that this strategic acquisition will enable strong supply chain synergies for our ON THE BORDER brand and enhance our ability to expand both ON THE BORDER and other Utz Power Brands geographically in the Midwest."

Over time, the company said it intends to expand production capabilities in the manufacturing plant to support growth in adjacent sub-categories.

Utz Brands expects to draw on its revolving credit facility to fund the $41 million cash purchase price.