Hanover, Pennsylvania-based Utz said the deal “vertically integrates” its On The Border tortilla chips brand.
Utz is buying Grand Rapids, Michigan-based Festida Foods from Great Lakes Festida Holdings in a deal that includes its manufacturing facility.
Festida Foods, which also makes corn chips and pellet snacks, is the largest manufacturer of tortilla chips for Utz’s On The Border brand.
Utz said it expects the transaction to be accretive to earnings in 2021 and beyond.
Dylan Lissette, its CEO, said: “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.
“Over time, we intend to expand production capabilities in the manufacturing plant to support growth in adjacent sub-categories and better serve current and future retail customers in an important area of geographic growth for the company. We believe this strategic combination will help accelerate growth and expand margins over the long term, and we look forward to continuing to serve Festida Foods’ existing customers.”
Kyle Curtiss, CEO of Festida Foods, said: “Utz will be in a position to leverage Festida’s manufacturing expertise, capacity, and warehousing to support its brands in the Midwest. Additionally, and of utmost importance to our business, Utz shares a belief in a strong company culture that both supports and encourages member development. They are truly an ideal long-term partner for Festida Foods.”
Festida generated net sales and adjusted EBITDA of approximately $14m and $6m, respectively, in FY2020.
Utz has steadily built a portfolio of snacks brands through acquisition. Its roster now includes Golden Flake, Zapp’s, Good Health and Boulder Canyon.
In January, Utz bought the Vitner’s brand from local peer Snak King Corp. for US$25m.