Hershey to acquire Amplify Snack Brands for $1.6 billion

The U.S. candy giant Hershey announced it will acquire Austin, Texas-based Amplify Snack Brands, Inc. for $1.6 billion.

Amplify manufactures snacks such as the Skinny Pop popcorn, Paqui Paqui tortilla chips, Tyrrells and Oatmega bars made with whey protein from grass-fed cows brands.

“The acquisition of Amplify and its product portfolio is an important step in our journey to becoming an innovative snacking powerhouse as together it will enable us to bring scale and category management capabilities to a key sub-segment of the warehouse snack aisle,” said Michele Buck, The Hershey Company President and Chief Executive Officer.

“Hershey’s snack mix and meat snacks products, combined with Amplify’s Skinny Pop, Tyrrells, Oatmega, Paqui and other international brands, will allow us to capture more consumer snacking occasions by creating a broader portfolio of brands,” said Buck.

This strategic acquisition is expected to be accretive to Hershey’s financial targets given the growth trajectory and margin structure of Amplify’s key products. Amplify’s brands compete in many attractive food categories that are capitalizing on fast-growing trends in snacking with a focus on better-for-you products that deliver clean, simple and transparent ingredients as well as unique flavors and forms.

Better-for-you products from Amplify will help Hershey

“Since Amplify’s inception in 2014, our company’s goal has been to bring transparency to our products, and clean ingredients and great tasting snacks to consumers,” said Tom Ennis, Amplify Snack Brands, Inc. President and Chief Executive Officer.

“This transaction is a continuation of our mission as Hershey also believes in bringing to consumers great-tasting snacks made with the best ingredients possible. Hershey is a great cultural partner for Amplify and I’m excited for our team who will have access to Hershey’s marketing and go-to-market resources to take our brands to the next level,” explained Ennis.

Hershey has agreed to acquire all of the outstanding shares of the snack company for $12 per share, valued at approximately $1.6 billion, including $600 million net debt and a make-whole payment of $76 million related to the Tax Receivable Agreement.

The Hershey Company Awarded for Diversity

The transaction will be funded with cash on hand and new debt and is not expected to impact Hershey’s current ratings. Hershey expects the transaction to be accretive to adjusted earnings per share-diluted, including transaction related non-cash amortization, in the first-year post closing with accretion increasing in year two.

The acquisition is not expected to affect the previously announced full year 2017 outlooks provided in both companies third quarter earnings release.

The agreement has been approved by the Boards of Directors of both companies. Affiliates of TA Associates, Amplify’s largest stockholder, and key insiders, who collectively represent approximately 57% of the outstanding shares, have agreed to tender their shares in the transaction.

The transaction is expected to close in the first quarter of 2018.