American salty snacks manufacturer Utz Brands Inc. announced this week that it has entered into a definitive agreement to purchase chips and snacks manufacturer Festida Foods from Great Lakes Festida Holdings Inc. and related entities for $41 million.
Festida Foods produces corn chips, tortilla chips and pellet snacks and is currently the largest manufacturer of Utz’s On The Border brand of tortilla chips.
“We expect that this strategic acquisition will enable strong supply chain synergies for our On The Border brand and enhance our ability to expand both On The Border and other Utz Power Brands geographically in the Midwest,” Dylan Lissette, the chief executive officer of Utz Brands, said in a release. “Over time, we intend to expand production capabilities in the manufacturing plant to support growth in adjacent sub-categories and expand margins over the long term, and we look forward to continuing to serve Festida Foods’ existing customers.”
The deal includes all of the business’ assets, including a facility in Grand Rapids, MI. Festida Foods brought in net sales of $14 million during FY 2020.
“As a premier supplier of tortilla chips to Truco Enterprises and On The Border, one of the fastest growing tortilla chip brands in the United States, Utz will be in a position to leverage Festida’s manufacturing expertise, capacity, and warehousing to support its brands in the Midwest,” said Kyle Curtiss, the CEO of Festida Foods, in a statement.
Utz anticipates the sale will close in the second quarter of this year. The transaction is subject to customary closing conditions and price adjustments.
Powder & Bulk Solids reported that Utz acquired Truco Enterprises, the producer of the On The Border brand, in late 2020 for $480 million.