Utz Brands acquires Grand Rapids tortilla chip manufacturer
GRAND RAPIDS – Snack Food Company Utz Brands Inc. has acquired a Grand Rapids-based tortilla chip partner and facility in a $ 41 million deal.
Utz (NYSE: UTZ), based in Hanover, Pennsylvania, announced the strategic acquisition of on Tuesday Great Lakes Festida Holdings Inc.who owns and operates Festida Foods Ltd. in Grand Rapids.
The companies have an established relationship as Festida Foods is the primary supplier of tortilla chips for Utz’s On the Border brand, which is part of the company’s extensive snack food portfolio.
“The Festida Foods team is excited to join the Utz family,” said Kyle Curtiss, CEO of Festida Foods, in a statement. “As the leading supplier of tortilla chips to Truco Enterprises (recently acquired by Utz) and On The Border, one of the fastest growing tortilla chip brands in the United States, Utz will be able to bring Festida’s manufacturing expertise, capacity and warehousing to use its brands to support the Midwest.
“In addition, and of great importance to our business, Utz shares the belief in a strong corporate culture that both supports and promotes the development of the members. They really are an ideal long-term partner for Festida Foods. ”
For Festida, the transaction is a multiple of 6.0 times the company’s 2020 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA). Festida Foods produces and packages a wide variety of tortilla and corn chips and pellet snacks for branded food companies.
Utz said the deal, which is expected to close in the second quarter, will have a positive impact on earnings in 2021. Utz expects it will use its revolving credit facility to fund the $ 41 million cash purchase.
Festida Foods is a family company with 160 employees. The company is headquartered in 219 Canton St. SW, a facility that Utz Brands will now operate.
“We expect this strategic acquisition to enable strong supply chain synergies for our On The Border brand and improve our ability to geographically expand both On The Border and other Utz Power Brands in the Midwest,” said Dylan Lissette, CEO of Utz . “Over time, we intend to expand manufacturing capabilities at the manufacturing facility to support growth in neighboring sub-categories and better serve current and future retail customers in an important area of geographic growth for the company.”
Utz operates 14 facilities in eight states, including Pennsylvania, Illinois, and Indiana. The chip brands also include Boulder Canyon and Zapp’s.