Uts Brands acquires ON THE BORDER brand tortilla chips
Also announces redemption of public warrants to help fund the transaction.
Utz Brands, Inc. (NYSE: UTZ) (“Utz” or the “Company”) announced that effective December 14, its subsidiaries Utz Quality Foods, LLC (“UQF”) and Heron Holding Corporation have completed the acquisition of Truco Enterprises (“Truco”), a seller of tortilla chips, salsa and queso under the ON THE BORDER(“OTB”) brand, for a total purchase price of $480 million, subject to a customary post-closing purchase price adjustment. The acquisition includes the ON THE BORDER trademarks in the manufacture, sale, and distribution of snack food products in the United States and certain other international markets.
The transaction represents an acquisition multiple of approximately 9.2x estimated fiscal 2020 Truco Adjusted EBITDA of $50 million excluding estimated synergies, and 8.4x estimated fiscal 2020 Truco Adjusted EBITDA including run-rate cost synergies of at least $5 million, in each case including approximately $20 million in net present value from expected tax assets resulting from the transaction. Utz expects the transaction to be accretive to earnings in 2021 and beyond.