The Hershey Company (NYSE:HSY) and B&G Foods, Inc. (NYSE:BGS) have announced that they have entered into a definitive agreement for Hershey to acquire Pirate Brands, including the Pirate’s Booty, Smart Puffs and Original Tings brands.
“Pirate’s Booty is a leading cheese puffs brand loved by moms and kids as a better-for-you treat,” said Mary Beth West, chief growth officer, The Hershey Company. “We expect the full Pirate Brands portfolio to be a great fit for Hershey’s growing Amplify business which is targeted toward consumers who are looking for great-tasting snacks without compromise.”
“Pirate Brands is a terrific business and we believe that it will thrive under the ownership of The Hershey Company,” said Bob Cantwell, president and chief executive officer, B&G Foods.
This strategic acquisition is expected to be accretive to Hershey’s financial targets given the strong growth trajectory and solid margin structure of the Pirate Brands business. Pirate’s Booty is a fast-growing brand in the more than $2.5B cheese puffs category, with retail sales up over 8 percent on a year-over-year basis, and a market leader for consumers seeking snacks with clean labels and no artificial flavors, colors or preservatives.
Pirate Brands will operate within Amplify, Hershey’s better-for-you snacking hub in Austin, TX, which is focused on driving growth in the warehouse snacking aisle with unique product flavors and forms like Skinny Pop, Paqui and Oatmega.
The Pirate Brands purchase price is $420 million, or approximately $360 million net of tax benefits. The transaction will be financed with cash on hand as well as short-term borrowings. The transaction is expected to close in the fourth quarter of 2018, subject to customary regulatory approvals and other closing conditions.