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Hershey to buy Pirate brands
Posted on Thursday, 13 September 2018 12:23
Hershey has announced it is buying US-based snack manufacturer Pirate Brands for USD 420.00 million.
The transaction will be funded by a combination of cash and short-term borrowings, and, subject to closing conditions and customary regulatory approvals, is expected to complete in the fourth quarter of 2018.
As a result of the deal, Hershey will acquire the target’s cheese puff products, which include Pirate’s Booty, Smart Puffs, and Original Tings.
The purchase is part of the buyer’s strategy to vary its portfolio, as customers are increasingly rejecting sugary foods for healthier alternatives.
A deal, according to media reports, will also help the company repay its debt and use proceeds from the transaction for future investments.
In 2017, Hershey expanded its snack range by acquiring Amplify Snack Brands for USD 921.00 million.
As a result of last year’s deal, its products now include skinny popcorn, and pacqui tortilla chips alongside its staple chocolate manufacturing business.
The transaction is expected to increase Hershey’s growth, with Pirate’s Booty achieving retail sales of up over 8.0 per cent annually, to becoming a market leader for customers who prefer snacks without artificial flavours and preservatives.
Under the terms of the acquisition, Pirate Brands will operate in the buyer’s Austin-based hub, which develops flavours for products such as Skinny Pop, a gluten free popcorn range, among others.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 38 deals targeting snack food manufacturers announced worldwide since the beginning of 2018.
The largest of these is worth USD 35.58 million, and involves an unnamed investor issuing shares to HS Food.
Formed in 1987, Pirate Brands is a manufacturer of cheese flavoured snacks.
The company’s three products have been verified as non-genetically modified, and have also been certified by the Gluten Free Certification Organization as well as by the Orthodox Union as a kosher food product.
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