Utz Brands, Inc., a manufacturer of branded salty snacks, announced that its subsidiary Utz Quality Foods, LLC has entered into a definitive agreement with Snak-King Corp. to acquire certain assets related to the Vitner’s brand, a brand of snack foods in the Chicago metropolitan market, for a total purchase price of $25 million, subject to customary purchase price adjustments. The acquired assets include the intellectual property, including the VITNER’S® trademark, and direct-store-delivery distribution assets related to Vitner’s branded products.
The transaction represents an acquisition multiple of approximately 5.9x last twelve months ended Sept. 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 Feb. 8, 2021.
Vitner’s, established in 1926, is an iconic brand in the Chicago area and its approximately 55 DSD routes will provide Utz a strengthened foothold in Chicago and the Midwest from which to further grow the presence of its Power Brands, which include Utz®, On The Border®, Zapp’s®, Golden Flake®, Good Health®, Boulder Canyon®, Hawaiian® Brand, and Tortiyahs!® (“Power Brands”). Following the acquisition, Vitner’s potato chips, cheese snacks, corn snacks and popcorn will move Utz from the #7 position to the #4 position among salty snacks in the Chicago market, the fourth largest salty snack market in the US at approximately $688 million in annual retail sales for the 52 weeks ending Nov. 29, 2020 according to IRI. Most of Vitner’s products are currently manufactured by Snak King, but Utz plans to transition manufacturing of most of those products to its own manufacturing plants after closing, further increasing utilization of Utz’s manufacturing network.
The Chicago market is the fourth largest salty snack market in the US with approximately $688 million in annual retail sales, and it grew approximately 9% for the last 52 weeks ended Nov. 29, 2020 according to IRI. Vitner’s 55 DSD routes provide an efficient, immediate route to market to further grow Utz’s Power Brands in the grocery, drug, and up-and-down the street channels in the Chicago metropolitan and Northwest Indiana areas.