Hershey to Acquire SkinnyPop Owner Amplify for $921 Million

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  • Chocolate maker also to assume about $600 million in debt
  • Acquisition is Hershey’s first major step beyond chocolate

Big Food Deals a Taste of What's to Come in 2018

Hershey Co. is expanding further beyond chocolate, agreeing to buy the owner of SkinnyPop popcorn and Tyrrell’s potato chips for $921 million.

The U.S. candy giant agreed to buy Amplify Snack Brands Inc. for $12 a share, a 71 percent premium to Friday’s closing price. The company has about $600 million in debt and has seen its stock value dive since it went public in 2015.

Hershey’s move signals the intent of new Chief Executive Officer Michele Buck to lead consolidation in the snacks industry after the maker of Kisses candy rejected a takeover bid from Oreo maker Mondelez International Inc. During a March investor meeting, Hershey’s management said it was particularly interested in companies that had accelerated growth in the U.S. snack industry. Hershey shares have gained 10 percent this year, valuing the company at $24 billion.

The U.S. confectionery business has been consolidating amid sluggish demand for chocolate. Among other deals in the sector, Mars Inc., the maker of M&Ms and Snickers, purchased a minority stake in another snack company, Kind Bar, last month. Kellogg Co. signed a $600 million deal for protein bar maker Rxbar in October. Hershey has been mentioned as one of the companies planning to bid for Nestle SA’s U.S. confectionery division. 

Hershey shares fell as much as 1.3 percent to $112.65 on Monday. Shares of Amplify, based in Austin, Texas, surged to $11.95.

Big marketers like Hershey have been seeking growth from niche acquisitions amid waning consumer enthusiasm for mainstream brands. Amplify also owns Paqui tortilla chips and Oatmega bars made with whey protein from grass-fed cows in New Zealand.

Amplify’s shares had fallen more than 60 percent to $7 on Dec. 15 since a public offering in August 2015, when investors paid $18 a share. Its third-quarter results this year missed analysts estimates and the company trimmed forecasts for the full year.

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