Utz ramps up competitor advantage in Midwest with acquisition of iconic Chicago snack brand
Vitner’s – founded in 1926 as the C.J. Vitner Company – was one of the oldest family-run snack food companies in the US when it was purchased by California-based Snak King in 2011. Its snack portfolio boasts over 100 products – including potato chips, popcorn, corn chips and pork rinds.
The deal includes Vitner’s trademark and other intellectual properties, as well as its distribution assets. Utz plans to capitalise on Vitner’s 55 direct-store delivery routes to expand its reach in the Midwest.
The deal will elevate the snack giant’s standing from the No. 7 to No. 4 player in Chicago’s lucrative salty snack market. Chicago represents the fourth largest salty snack market in the US with approximately $688m in annual retail sales, growing approximately 9% in the 52 weeks ended 29 November 2020, according to IRI data.
“This transaction is a continuation of our strategy to successfully build long-term value and share by expanding in major metropolitan areas, like we did in New York City in 1994, Boston in 2004, Pittsburgh in 2006 and Atlanta in 2011,” said Dylan Lissette, CEO of Utz.
“This acquisition strengthens our competitive position and will be a spark for continued growth in the Midwest. We are confident this transaction will drive long-term value creation for our shareholders and help position Utz for continued long-term growth.”
Expanding in leaps and bounds
The transaction marks Utz’s third major acquisition since it went public last year.
In November, it announced it was buying the On the Border brand for $480m, a month after it purchased H.K. Anderson peanut butter-filled pretzels from Conagra Brands. In 2019, Utz bought Snyder of Berlin from Conagra, as well as merging with Illinois-based snack brand Kitchen Cooked.
Vitner’s snacks are currently manufactured at a 222,500-square-foot factory in Freeport. However, the facility is not part of the sale and Utz has said it plans to transition manufacturing for most of Vitner’s products to its own plants.
Snak King said it will continue ramping up production at the site to manufacture its own private-label snacks under the Whole Earth, El Sabroso, Granny Goose and Jensen’s Orchard brands. Snak King also operates manufacturing facilities in California.
The company does not expect any changes in jobs at the facility. “In fact, we have a lot of openings and would love people to apply to become part of the Snak King team,” said Snak King CEO Barry Levin.
He added Vitner’s is ‘thrilled’ to become part of Utz.
“We are thrilled to see the Vitner’s brand, established almost 95 years ago, become part of the Utz Brands, Inc. platform. Utz will be able to leverage its world-class family of brands and expertise in DSD operations to help Vitner’s continue to serve the Chicago market.”
Vitner’s generated net sales of $25m in the 12 months ended 27 September 2020. The purchase price represents a multiple of approximately 5.9x the brand’s pro forma adjusted EBITDA of $3.4m, assuming approximately $5m in net present value from expected tax assets resulting from the transaction. 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 on February 8.