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Utz Brands Set to Acquire Festida Foods

The acquisition will vertically integrate the largest supplier of Utz’s ON THE BORDER tortilla chip brand and enhance the company's expansion geographically in the Midwest.

Utz Brands Logo

Utz Brands has announced its subsidiaries have entered into a definitive agreement with Great Lakes Festida Holdings and related entities to acquire all of the assets, including the real estate located in Grand Rapids, Mich., related to the operation of Festida Foods, a leading manufacturer of tortilla chips, corn chips, and pellet snacks, and the largest manufacturer of tortilla chips for Utz’s ON THE BORDER tortilla chip brand. The total purchase price is $41 million and is subject to customary purchase price adjustments.

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 in the second quarter of 2021.

“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,” says Dylan Lissette, CEO of Utz. “Over time, we intend to expand production capabilities in the manufacturing plant to support growth in adjacent sub-categories and better serve current and future retail customers in an important area of geographic growth for the Company. We believe this strategic combination will help accelerate growth and expand margins over the long term, and we look forward to continuing to serve Festida Foods’ existing customers.”

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“The Festida Foods team is thrilled to be joining the Utz family,” says Kyle Curtiss, CEO of Festida Foods. “As a premier supplier of tortilla chips to Truco Enterprises and ON THE BORDER, one of the fastest growing tortilla chip brands in the United States, Utz will be in a position to leverage Festida’s manufacturing expertise, capacity, and warehousing to support its brands in the Midwest. Additionally, and of utmost importance to our business, Utz shares a belief in a strong company culture that both supports and encourages member development. They are truly an ideal long-term partner for Festida Foods.”

After eliminating tolling fees between Festida Foods and Utz subsidiaries, Festida generated incremental FY 2020 Net Sales and Adjusted EBITDA of approximately $14 million and $6 million, respectively. Utz expects to receive approximately $5 million in net present value from expected tax benefits resulting from the transaction and to achieve run-rate Selling and Administrative cost synergies of at least $1 million. The transaction is expected to be accretive to earnings in 2021 and beyond.

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