"Hershey is focused on developing a better-for-you confection portfolio that offers a variety of choices to meet the evolving needs of our consumers," said Chuck Raup, president U.S. "Lily's is a great strategic complement to our existing offerings in this growing segment of the confection category."

Better-for-you snacking continues to grow faster than mainstream segments across snacking categories such as potato chips, ice cream and cookies. However, Hershey says better-for-you offerings are still under-developed in confectionery, and the Lily's acquisition would allow Hershey to accelerate this growth and reimagine the future of the candy aisle in partnership with retailers.  

Based in Boulder, Colorado, Lily's traces its roots to co-founder Cynthia Tice's decision to raise awareness about better-for-you foods by opening Center Foods, a natural foods store, in Philadelphia in 1978. In 2012, Cynthia launched four Lily's chocolate style bars nationally in Whole Foods Market. and the expanded line of bars, baking chips and other confections can be found across the country at key retailers. The brand's mission is to offer consumers a range of great tasting, low sugar treats.

"Cynthia had the vision that consumers wanted a better-for-you option in confection,  and today 80 percent of adults want to cut back on their sugar intake," said Lily’s CEO Jane Miller. "By joining the Hershey's family of brands, Lily's will become a platform confection brand making better-for-you options easily accessible to all consumers." 

The acquisition will be financed with cash on hand as well as short-term borrowings. Lily's acquisition is expected to be slightly accretive to earnings in the first full year post closing. The acquisition is subject to customary regulatory approvals and is expected to close in the next few months.