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Utz Brands Inc (NYSE: UTZ) is trading lower Thursday after the company reported worse-than-expected quarterly earnings and revenue.
Utz is a snack food company that produces a variety of potato chips, pretzels, and other snacks.
What Happened: Utz reported first-quarter earnings of 13 cents per share, which came in below the estimate of 14 cents per share. It reported revenue of $269.2 million, which came in below the estimate of $274.87 million.
“In the first quarter, we continued to execute against our value creation strategies to position the company for long-term success. Even as we lapped significant outperformance versus the category in the early weeks of the COVID-19 pandemic last year, we are pleased with our Power brands’ sales momentum and the continued growth in our emerging and expansion geographies, said CEO Dylan Lissette.
Utz acquires long time co-manufacturer of tortilla chips for On the Border brand Utz Brands Inc. is acquiring Festida Holdings – the primary supplier of the tortilla chips for the On the Border brand – which will cement its distribution footprint in the Midwest.
The transaction includes all of Festida’s assets, including the real estate located in Michigan, and represents a multiple of 6x Festida’s adjusted 2020 EBITDA of $6m (excluding estimated synergy).
Utz will be drawing on its revolving credit facility to fund the $41m cash purchase and anticipates it to be accretive to its 2021 earnings, generating net present value of $5m from tax benefits and $1m in cost synergies.
Image courtesy of Pixabay
Representative image The $41 million transaction will support Utz’s On The Border tortilla chips brand and expand its portfolio of salty snacks.
American salty snacks manufacturer Utz Brands Inc. announced this week that it has entered into a definitive agreement to purchase chips and snacks manufacturer Festida Foods from Great Lakes Festida Holdings Inc. and related entities for $41 million.
Festida Foods produces corn chips, tortilla chips and pellet snacks and is currently the largest manufacturer of Utz’s On The Border brand of tortilla chips.
“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,” Dylan Lissette, the chief executive officer of Utz Brands, said in a release. “Over time, we intend to expand production capabilities in the manufact
Dive Brief:
Utz Brands is buying Festida Foods, a manufacturer of tortilla chips, corn chips and pellet snacks, for $41 million, the company said in a statement. Festida is the largest manufacturer of tortilla chips for Utz s On The Border tortilla chip brand.
Utz said the acquisition of Michigan-based Festida will improve the supply chain for On The Border and increase the company s ability to expand the geographic presence of the brand and others in its portfolio throughout the Midwest. The deal is expected to close before July.
Utz has been on an acquisition binge since it came public last year after merging with blank check company Collier Creek Holdings. The company has made four deals since August.
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