Utz Quality Foods LLC, one of Pennsylvania’s family-owned snack-food giants, will become a publicly traded company through a merger that values the almost 100-year-old company at more than $1 billion.
The deal, announced Friday, gives Utz’s controlling Rice family the opportunity to cash out $60 million of their ownership stake while maintaining control of the potato chip and pretzel maker founded by Bill and Salie Utz in 1921.
“As a public company, I am confident that Utz will continue to grow its importance within the salty snack industry, bringing more of our brands to an ever-greater consumer audience across the U.S.,” Utz chief executive Dylan Lissette said in a statement. Lissette married into the Rice family.
If the deal is completed in the fall, as expected, it would likely leave Chester-County-based Herr’s Foods Inc. as the largest privately held and family-owned snack company in the U.S. Herr’s ranked 10th in the nation last year, according to data presented by Utz and its acquirer Collier Creek Holdings. Herr’s and the Hanover-based Utz and were the only privately held companies in the top 10.
Utz is expected to trade on the New York Stock Exchange as Utz Brands Inc., with the ticker symbol UTZ.
Utz had $768 million in revenue last year and ranked fourth in market share for U.S. salty snacks behind PepsiCo, Campbell Soup Co., and Kellogg Co., according an investor presentation on the deal. Utz says it produces more than five million pounds of snacks in 14 factories every week and reaches more than 75,000 retail outlets nationwide.
Since 2011, Utz has completed 11 acquisitions, enabling the York County company to double its annual revenue growth rate to 8%, from the 4% it would have been without the deals. Utz also piled on debt, leading Standard & Poor’s to give the company an extremely low B- credit rating last year after one of its acquisitions failed to perform as expected.
The Collier Creek deal calls for the repayment of $376 million in debt and other obligations. Even so, Utz is still expected to have more than $400 million in net debt after the deal is done.
Lissette and the Rice family will continue to own 50.2% of Utz’s shares after the deal is done.
It’s not the first time Utz tried to sell. In 2009, the company agreed to a deal with its cross-town rival Snyder’s of Hanover Inc., also family owned. That deal fell apart after it became clear that the Federal Trade Commission was going to drag out the review.