Hershey to Buy Amplify Snack Brands

HERSHEY, Pa. and AUSTIN, Texas — The Hershey Co. has entered into a definitive agreement to acquire Amplify Snack Brands Inc. for $1.6 billion.

Under terms of the deal, Hershey will acquire all of the outstanding shares of Amplify for $12 per share. The transaction will be funded with cash on hand and new debt, and is not expected to impact Hershey's current ratings, according to the company.

"The acquisition of Amplify and its product portfolio is an important step in our journey to becoming an innovative snacking powerhouse as together it will enable us to bring scale and category management capabilities to a key sub-segment of the warehouse snack aisle," said The Hershey Co. President and CEO Michele Buck.

"Hershey's snack mix and meat snacks products, combined with Amplify's Skinny Pop, Tyrrells, Oatmega, Paqui and other international brands, will allow us to capture more consumer snacking occasions by creating a broader portfolio of brands," Buck added.

Hershey noted that the following are takeaways from the acquisition:

• Strengthens Hershey's position in the snacking aisle and broadens its portfolio of innovative savory snacking brands.
• Expected to drive significant shareholder value through growth and margin expansion, as well as identified cost synergies.
• Annual run-rate synergies of approximately $20 million are expected to be generated over the next two years from cost savings and portfolio optimization.
• Expected to be accretive to adjusted earnings per share in the first-year post closing.

The acquisition is not expected to affect the previously announced full year 2017 outlooks provided in Hershey's and Amplify's third quarter earnings release and conference calls, according to the companies.

"Since Amplify's inception in 2014, our company's goal has been to bring transparency to our products, and clean ingredients and great tasting snacks to consumers. This transaction is a continuation of our mission as Hershey also believes in bringing to consumers great-tasting snacks made with the best ingredients possible," said Amplify Brands President and CEO Tom Ennis.

"Hershey is a great cultural partner for Amplify and I'm excited for our team who will have access to Hershey's marketing and go-to-market resources to take our brands to the next level," he added.

Both companies' board of directors have approved the definitive agreement. Affiliates of TA Associates, Amplify's largest stockholder, and key Amplify insiders, who collectively represent approximately 57 percent of the outstanding shares, have agreed to tender their shares in the transaction.

The transaction is subject to Amplify's stockholders tendering a majority of the company's outstanding shares on a fully diluted basis prior to the expiration of the tender offer, certain regulatory approvals and other customary conditions.

The deal is expected to close in the first quarter of 2018.

J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are serving as financial advisors to Hershey in connection with this transaction, and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor. 

Jefferies LLC is serving as the financial advisor to Amplify and Goodwin Procter LLP is serving as legal advisor.