Utz-Collier Creek merger to go public with projected US$1.56bn enterprise value

08 Jun 2020 --- Utz Quality Foods, a US-based manufacturer of branded savory snacks, has entered a definitive agreement with investment company Collier Creek Holdings to merge and form Utz Brands, a publicly listed company. Utz Brands will be positioned as a pure play snack food platform in the US. This merger will introduce Utz as a public company with an anticipated initial enterprise value of approximately US$1.56 billion, or 11.6 times its estimated 2021 Pro Forma Adjusted EBITDA of US$134 million.

“As we approach our 100-year anniversary, we are excited to take this important step forward to position Utz for its next century of growth,” says Dylan Lissette. “This transaction enables Utz to continue its long-term growth plans and provides greater access to capital to fund organic and inorganic growth.”

Lissette, who has served as Utz’s CEO since 2013 and has worked at the company for almost 25 years, will continue to lead the business along with the existing management team. Upon the expected closing of the transaction in the third quarter, it is anticipated that Utz Brands will trade under the symbol “UTZ” on the New York Stock Exchange.

Founded in 1921, Utz has a portfolio tapping into demands for craft and better-for-you offerings, including the brands Utz, Zapp’s, Golden Flake, Good Health and Boulder Canyon, among others. The company operates 14 manufacturing facilities nationwide with a broad range of capabilities, producing a full line of potato chips, pretzels, cheese snacks, veggie snacks, pork skins, bar and party mixes and other snacks.

The at-home market is boosted by legions of locked down home workers and families turning to snacking, which spells significant gains for this market.While out-of-home channels have taken a battering by the coronavirus pandemic, the at-home market is boosted by legions of locked down home workers and families turning to snacking, which spells significant gains for this market. These trends have benefited the likes of Mondelēz International and PepsiCo, which have both seen strong growth in the snacking segment, resulting from the blurring of meal occasions.

Collier Creek was co-founded by Chinh Chu, Roger Deromedi and Jason Giordano, with a focus on the consumer goods sector. Deromedi, who had a long tenure as Chairman of Pinnacle Foods and, prior to that, as CEO of Kraft Foods, will become Chairman of Utz Brands. Utz Brands' board of directors will be composed of a majority of independent directors under the applicable listing rules of the New York Stock Exchange.

“We look forward to working closely with Utz’s management to unlock meaningful value for all stakeholders by investing in innovation and marketing to delight consumers, expanding distribution into new retailers and geographies, broadening the Utz product offering, driving operational efficiencies, and capitalizing on strategic acquisition opportunities that further enhance Utz’s unique platform and brand portfolio,” details Giordano.

Utz Brands will remain headquartered in Hanover, Pennsylvania, US. Proceeds from the transaction are expected to be used primarily to repay existing borrowings at Utz. The Rice and Lissette family, the founding family and owners of Utz, will retain more than 90 percent of its existing equity stake, which will represent more than 50 percent ownership in Utz Brands upon completion of the transaction.

“Our partnership with Utz is consistent with our philosophy of investing in high-quality, durable businesses with compelling growth opportunities. This transaction delivers significant near-term value to our existing shareholders, and we are fully aligned with the Rice and Lissette family to drive long-term value creation in the future,” Chu concludes.

Edited by Benjamin Ferrer

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