- Utz Quality Foods — maker of Utz, Dirty and Bachman potato chip brands — will acquire Inventure Foods — owner of TGI Friday's products, Tato Skins and Nathan's Famous licensed brands — for $165 million, reports Food Business News. The deal is scheduled to close by the end of the year.
- In addition to bagged snacks, Inventure also produces a range of microwaveable riced vegetable side dishes made of cauliflower, carrot and sweet potato.
- "The company’s specialty snack food products and brands, as well as its geographic footprint, customer relationships and distribution strengths, are highly complementary to our business and we look forward to continuing Inventure’s strong heritage of innovation in both healthy and indulgent snacking," Utz CEO Dylan Lissette told Food Business News. Utz is the largest privately held and family-managed branded salty snack manufacturer and marketer in the U.S.
The deal seems like a savvy investment for the snack giant — not only do many of Inventure's brands fit seamlessly into Utz's existing portfolio, but some also expand the potato chip company into the health food space.
Consumer demand for convenience may drive sales of on-the-go snack products, but that doesn't mean they want to reach for a bag of potato chips. Shopper appetites for nutritious, fresh offerings is growing. Inventure's heat-and-eat vegetables should give Utz's product lineup a nice health halo and deliver on shopper interest in premium produce.
This acquisition is just one more stepping stone on Utz's path to growth. In October 2016, the snack maker acquired Golden Flake, a producer of chips, fried pork skins and cheese curls. Shortly after that, Utz received a large investment from Metropoulos & Co., the firm that helped pull Hostess Brands out of liquidation in 2013. With that undisclosed amount of cash infusion, Utz has been able to maintain acquisitive growth and better compete with major snack producers like PepsiCo, Kellogg, Mondelez and General Mills.
By gobbling up Inventure, Utz will be able to leverage a broader footprint and additional distribution strengths to compete with the leading companies. It will be interesting to see if the deal spurs further consolidation in the snack space, which has become increasingly competitive as shopper interest has grown in convenient meal solutions and snacks as a meal replacement.
As part of the $165 million purchase price, Utz will assume about $75 million in debt. They will also cover approximately $8 million of closing costs and approximately $3 million due to equity award holders.
M&A between snack makers seems to be heating up. Inventure just sold off its frozen foods division, including its Rader Farms and Willamette Valley Fruit Company brands, to Oregon Potato Company for $50 million. Outside players are also eyeing the category. Hershey launched a line of "snackfections" earlier this year to meet consumer demand for sweet and salty products. Amazon has grown a snacking empire, capturing $215 million worth of sales in the space between January and August of this year.