Hershey, PA — The Hershey Co. announced it will acquire all outstanding shares of better-for-you snack maker Amplify Snack Brands in a $1.6 billion deal, through which it also assumes nearly $600 million in Amplify debt.
“The acquisition of Amplify and its product portfolio is an important step in our journey to becoming an innovative snacking powerhouse as together it will enable us to bring scale and category management capabilities to a key sub-segment of the warehouse snack aisle,” said Michele Buck, The Hershey Co. president and CEO in a statement announcing the deal.
Amplify brands include Skinny Pop popcorn, Oatmega grass-fed whey protein cookies, Paqui non-GMO chips and Tyrrell’s hand-cooked potato chips. They fall into the fast-growing better-for-you snack category with transparent ingredients and unique flavors.
For Amplify, Hershey’s experience with category management at the retail level will give it added distribution clout. Hershey has agreed to acquire all the outstanding shares of Amplify for $12 per share. That’s a 71.4% premium over Friday’s closing stock price of $7.
“Since Amplify’s inception in 2014, our company’s goal has been to bring transparency to our products, and clean ingredients and great tasting snacks to consumers,” said Tom Ennis, Amplify Snack Brands, Inc. President and CEO in the deal announcement. “This transaction is a continuation of our mission as Hershey also believes in bringing to consumers great-tasting snacks made with the best ingredients possible.”
“Large CPG companies, particularly food and beverage companies, are aggressively seeking to acquire niche on-trend brands to compensate for sluggish growth in their larger established brands,” banker William Hood, managing director of William Hood & Co., told WholeFoods Magazine. “In the case of Hershey, there is a recognition that the consumer is looking for convenience and less sugar, resulting in interest in snacking and where possible healthy snacking. Other examples of similar appetite for healthy snacking include Kellogg’s acquisition of RxBar earlier this year, as well as the Mars investment in KIND Bar. In all cases we are seeing very healthy strategic multiples paid for these businesses.”
Hershey paid a multiple of 15x EBITDA for Amplify Snack with an assumption for synergies, Hood added.