Utz Brands, Inc. (NYSE: UTZ), a leading US manufacturer of branded salty snacks, announced that its subsidiary Utz Quality Foods, LLC has purchased a brand new, recently completed snack food manufacturing facility in Kings Mountain, North Carolina from Evans Food Group Ltd. d/b/a Benestar Brands and related affiliates.
The purchase includes the existing building, land, and pork-rind production equipment. Utz will convert the space into a fully operational snack food manufacturing facility starting in 2022. The current 125,000 square foot facility can be expanded to 200,000 square feet and is expected to add over 115 local jobs.
Makers of iconic potato chips, tortilla chips, pretzels, cheese balls, pork rinds, and more, Utz’s portfolio of household favorite brands includes Utz, ON THE BORDER Chips & Dips, Golden Flake, Zapp’s, Good Health, Boulder Canyon, Hawaiian Brand, and TORTIYAHS!, among other brands.
The new Kings Mountain Facility will support the increased and growing demand for Utz’s brands in the Southeast, Northeast, and Mid-South regions, which grew 14.4%, 14.5%, and 15.0%, respectively for the 26-week period ending March 20, 2022 (IRI Mulo-C).
The new facility contains state-of-the-art high-speed pork rind manufacturing lines and will enable multi-line production across Utz’s key sub-categories in the near future. Operationalizing the recently constructed Kings Mountain Facility is quicker and more cost-effective than building from the ground up or renovating an existing facility.
Benestar will also become a supplier of pork pellets from its Chicago operations to Utz. The Transaction is expected to be accretive to earnings within 12-18 months due to the expected strong supply chain cost savings.
Cary Devore, Chief Operating Officer, Utz Brands, Inc:
“With continued growth and excitement for our snack food brands, we are very excited to expand our roots in North Carolina, where we will be adding over 115 new jobs over time.”
“This is a strong step forward in optimizing our plant and logistics network, and it will allow us to in-source manufacturing across several product types that we currently outsource to some degree. This Transaction increases our operational flexibility and will contribute to higher long-term margins over time, based on identifiable, multi-faceted cost synergies.”
Bruce Myers, President of Benestar:
“As a vertically integrated manufacturer, we believe our operations will be optimized by supplying Utz with our Chicago-based pellet production while selling the downstream manufacturing operations to Utz. This type of partnership will only enhance operations of both companies going forward.”
Transaction Details
The total purchase price of the Transaction was approximately USD 38.4 million, plus assumed liabilities of USD 1.3 million, and was funded with approximately USD 10.4 million in cash and USD 28.0 million of proceeds from the issuance and sale of 2.1 million shares of the Company’s Class A Common Stock (the “Shares”) to affiliates of Benestar in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”)
The Shares have not been registered under the Securities Act, or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements. The Company has agreed to provide the purchasers customary registration rights with respect to the Shares.
This press release does not constitute an offer to sell, or a solicitation of an offer to purchase, the Shares in any jurisdiction in which such offer or solicitation would be unlawful.
