Utz Bags A 91% Premium

Intersnack reached into the American snack aisle Tuesday and pulled out Utz — at a price shareholders could savor. The German snack manufacturer agreed to acquire the company’s Class A shares for $14.25 apiece in cash, approximately 91% above Utz’s previous closing price of $7.45. The transaction values the maker of Utz potato chips, Zapp’s and On The Border products at roughly $2.9 billion including debt. Shares closed up 88.7% Tuesday at $14.06, leaving them just 19 cents below the offer price after trading at record volume, and were indicated little changed early Wednesday.

The acquisition gives Intersnack something it cannot easily manufacture — an established position on American store shelves. The privately owned company generated approximately $5 billion in sales last year and sells brands including Tyrrells, Hula Hoops and McCoy’s across Europe, Asia and Oceania, but it currently lacks a meaningful U.S. presence. Utz brings a century-old brand, national distribution and a collection of regional names that Intersnack can support with its larger marketing, manufacturing and product-development capabilities.

Under the deal, Utz will not entirely leave its family roots behind. Intersnack and entities controlled by the founding Rice and Lissette family will each own 50% of the private company, with the family rolling over and reinvesting part of its existing stake. Dylan Lissette will become executive chair, and Utz says it will maintain its commitment to its Hanover, Pennsylvania, headquarters. The transaction will be financed with approximately $920 million from Intersnack, a new $1.1 billion term loan, a $250 million asset-based lending facility and equity from the family.

The companies expect the deal to close during the fourth quarter, subject to regulatory approval and support from both a majority of all Utz shares and a majority of votes cast by unaffiliated shareholders. The founding family and related parties have already agreed to vote shares representing approximately 42% of Utz’s common stock in favor of the transaction. Tuesday’s narrow gap between the share price and the offer suggests investors see relatively little standing between Utz and the checkout aisle. After more than a century of filling snack bags, the company is leaving public markets with one final, satisfying crunch.

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