Hanover, PA — Utz Brands, Inc., a U.S. manufacturer of branded salty snacks, reports its subsidiary, Utz Quality Foods, LLC, has entered into a definitive agreement with Snak King Corp. to acquire certain assets related to Vitner’s, a brand of snack foods in the Chicago metropolitan market, for a total purchase price of $25 million.
The acquired assets include the intellectual property, including the Vitner’s trademark, and direct-store-delivery distribution assets related to the brand. The transaction represents an acquisition multiple of approximately 5.9 times the past 12 months ended September 27, 2020 Vitner’s Pro Forma Adjusted EBITDA of $3.4 million assuming approximately $5 million in net present value from expected tax assets resulting from the transaction. Utz expects the transaction to be accretive to earnings in 2021 and beyond. The transaction is subject to customary closing conditions and is expected to close on February 8th.
Following the acquisition, Vitner’s potato chips, cheese snacks, corn snacks and popcorn will move Utz from the number seven position to the number four position among salty snacks in the Chicago market, the fourth largest salty snack market in the U.S. at approximately $688 million in annual retail sales for the 52 weeks ending November 29, 2020, according to IRI. Most of Vitner’s products are currently manufactured by Snak King, but Utz says it plans to transition manufacturing of most items to its own manufacturing plants after closing, further increasing utilization of Utz’s manufacturing network.
“This strategic acquisition will make Utz a more significant competitor in the Chicago area. Combined with our recently announced acquisition of the On the Border tortilla chip, salsa and queso brand, we create a strong brand platform to better serve the primary salty snack channels and continue to expand rapidly in this important growth market. This transaction is a continuation of our strategy to successfully build long-term value and share by expanding in major metropolitan areas, like we did in New York City in 1994, Boston in 2004, Pittsburgh in 2006 and Atlanta in 2011,” says Dylan Lissette, CEO of Utz. “This acquisition strengthens our competitive position and will be a spark for continued growth in the Midwest. We are confident this transaction will drive long-term value creation for our shareholders and help position Utz for continued long-term growth.”
“We are thrilled to see the Vitner’s brand, established almost 95 years ago, become part of the Utz Brands, Inc. platform,” says Barry Levin, CEO of Snak King. “Utz will be able to leverage its world-class family of brands and expertise in DSD operations to help Vitner’s continue to serve the Chicago market.”