Boosting snack bar portfolio: Hershey to acquire ONE Brands in US$397 million deal

28 Aug 2019 --- The Hershey Company is strengthening its position in the snacks space by entering into a definitive agreement to acquire ONE Brands, LLC, the maker of a line of low-sugar, high-protein nutrition bars. The US$397 million deal extends Hershey’s better-for-you brand portfolio and closely follows the chocolate giant’s minority investments in emerging snacking businesses. Last week, Hershey invested in Fulfil Nutrition and Blue Stripes Cacao Shop as part of the company’s on-going strategy to better cater for consumers’ growing preference for healthier options.

The acquisition is expected to enable Hershey to provide a competitive offering of brands in the nutrition bar category. ONE Brands will complement the company’s existing Oatmega business, which was acquired as part of the 2018 acquisition of Amplify Snack Brands, Inc., and its recent investment in Fulfil Holdings limited, a European leader in vitamin-fortified, high-protein bars.

Hershey intends to expand the existing ONE Brands offerings by leveraging its core capabilities in sales and distribution, category management and digital commerce.

ONE Brands’ purchase price is US$397 million, or approximately US$325 million net of tax benefits. The transaction will be financed with cash on hand as well as short-term borrowings, according to Hershey.

The transaction, which is expected to close in the fourth quarter of this year, is subject to customary regulatory approvals and other closing conditions. ONE Brands acquisition is expected to be slightly accretive to earnings in the first full year post closing, notes Hershey.

“ONE’s portfolio of great tasting nutrition bars, with indulgent flavors such as Birthday Cake, Maple Glazed Doughnut and Peanut Butter Pie, will be a strong strategic fit within our overall innovative snacking powerhouse vision,” says Mary Beth West, Hershey’s Chief Growth Officer. “Our beloved confection brands will continue to be the engine that drives our business while we broaden our better-for-you portfolio, offering more snacking choices for more consumers,” she says.

Last September Hershey and B&G Foods, Inc. entered into a definitive agreement for Hershey to acquire Pirate Brands, including the Pirate’s Booty, Smart Puffs and Original Tings brands in a deal that is worth US$420 million. The move is also part of the company’s strategy to bolster its foothold as a better-for-you snacking leader.

Hershey’s moved to diversify focus to better cater to US consumers’ shifting preferences in late 2017 when it acquired Amplify Snack Brands, the company behind SkinnyPop popcorn.

ONE Brands, formerly known as Oh Yeah! Nutrition was founded in 1999 by Ron McAfee. The company, currently backed by Cavu Venture Partners, has roots in sports nutrition.

“We’re proud of the brand we built and look forward to continuing to build on our momentum with the strength and capabilities that Hershey can provide,” says McAfee, Founder, ONE Brands. “Our consumer proposition, brand equity and team provide us with confidence, especially when combined with an industry leader like Hershey,” adds Peter Burns, CEO, ONE Brands, LLC.

Edited by Gaynor Selby

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