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Potato-chip giant Utz to buy Golden Enterprises for $135M

Utz Quality Foods Inc., the family-owned Hanover, Pa.-based potato-chip and snack-food company that's been growing like a well-fed teenager, has agreed to pay about $135 million, or $12 a share, for Golden Enterprises Inc., the publicly traded Birmingham, Ala.-based maker of Golden Flake chips and other snack products.

Utz has gotten bigger by both organic growth and acquisitions after canceling a merger with rival Snyder’s of Hanover in 2009.
Utz has gotten bigger by both organic growth and acquisitions after canceling a merger with rival Snyder’s of Hanover in 2009.Read more

Utz Quality Foods Inc., the family-owned Hanover, Pa.-based potato-chip and snack-food company that's been growing like a well-fed teenager, has agreed to pay about $135 million, or $12 a share, for Golden Enterprises Inc., the publicly traded Birmingham, Ala.-based maker of Golden Flake chips and other snack products.

That's a premium to Golden's recent trading price of about $7. "This is an excellent transaction for our stockholders, our customers, and our employees," Golden chief executive Mark McCutcheon said in a statement.

Golden employs about 700 at plants in Birmingham and Ocala, Fla. They will join Utz's existing workforce of 2,700, said Utz chief executive Dylan Lissette.

"It is the largest acquisition we have done," Lissette said Tuesday.

Snacks "are a very competitive market," he said, and "our number one goal is to remain relevant, in a geography that has expanded," with foreign manufacturers and U.S. private-equity investors competing to purchase local U.S. brands.

Utz, controlled by Hanover's Rice family (Lissette's wife is a Rice), has expanded by a combination of organic growth and acquisitions since canceling a merger with neighborhood rival Snyder's of Hanover in 2009.

Since then, Lissette said, "strategic opportunities have come our way," both for regional chip brands and for "better-for-you" and niche-brand snacks.

In 2011, Utz bought Zapp's and "Dirty" brand potato chips, and upgraded the Louisiana-based plant that makes them. Lissette noted that both brands, for example, are now sold in Wawa and other store chains. Chips tend to be spicier down South, he said. Golden flavors include Sweet Heat and dill pickle, among others.

Utz also bought Wachusett Potato Chip Co. in Massachusetts and the Reading-based Bachmann and Jax Cheese Curls snack lines, which Utz moved, with production equipment, to its Hanover plant, preventing what Lisette said might have been "the brand's demise."

The Reading plant remains open under the management of Savor Street Foods, making private-label pretzels.

Utz has also acquired GoodHealth brands, including its "Veggie Straws" and kettle-cooked chips fried in avocado and olive oil.

Utz was founded in 1921 by William and Salie Utz. Golden was founded two years later by Frank Mosher and his partners, and sold in 1946 to the Bashinsky family, which remained the largest shareholders after taking the company public in the early 1980s.

Golden Flake, which calls its product "the South's Original Potato Chip," will operate "as a separate subsidiary under the leadership of its current management team" in Birmingham, Utz said in a statement.

The deal faces federal antitrust approval and is scheduled to close before the end of the year. Bashinsky family trusts have already approved the purchase, pending a three-day window for rival bids.

North Point Advisors L.L.C. and Sirote & Permutt P.C. counseled directors on Golden's board. Bankers at New York-based Sandler O'Neill + Partners and lawyers at Cozen O'Connor of Philadelphia advised Utz.

JoeD@phillynews.com

215-854-5194 @PhillyJoeD

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