By acquiring third party direct store delivery distributors Clem Snacks, Inc., and J&D, the salty snack maker adds approximately 125 DSD routes in New York City and the surrounding area, with which it says it can “provide enhanced retailer support with increased distribution facilities and sales management, higher service velocities and an expanded route distribution system.”
As such, the deal will help the company accelerate share gains in the salty snack category across the geographic region, it adds in the announcement.
The deal, which is expected close in the first quarter of 2022, is the latest in a long list of acquisitions over the past two years, which have focused on reinforcing its supply chain and distribution capabilities in different regions in and beyond the East Coast where it is headquartered and cultivated a cult-like following over the past 100 years.
Most recently, Utz acquired in November for $56m the equity and certain real estate assets of the family-owned premium tortilla chip, cracker and corn chip maker RW Garcia, which brought it manufacturing facilities in Nevada and North Carolina.
In addition to bringing Utz “strong supply chain synergies” and ability to expand distribution of its existing brands, Utz CEO Dylan Lissette said at the time that RW Garcia’s “great track record of better-for-you innovation and production capabilities” would supplement Utz’s better-for-you product portfolio, which should exceed $100m annually after closing.
This deal complemented the June 2021 acquisition of Michigan-based Festida Foods for $41m, which brought Utz production capabilities in the North, East and West regions of the US. The deal was touted by Lissette for its “strong supply chain synergies” for Utz’ On The Boarder brand and that ability to expand into the Midwest.
Utz acquired the On the Boarder brand when it purchased Truco Enterprises for $480m from Insignia Capital Group in late 2020 in a deal that significantly strengthened its national footprint .
That deal followed the acquisition of H.K. Anderson peanut butter-filled pretzel brand from Conagra for less than $10m and preceded the acquisition of intellectual property and direct-store delivery distribution assets related to Viner’s snack brand from Snak-King Corp for $25m last fall.
These deals were made possible by Utz’ decision to team with Collier Creek Holdings in mid-2020 and become a publicly traded company on the New York Stock Exchange as UTZ beginning in August 2020.
The company’s strategy also seems to be paying off with net sales up 26.1% in the third quarter, driven mostly by positive contributions from acquisitions, and organic net sales up 1% on top of a strong 10% organic growth in the third quarter of 2020. The company also reported share gains in grocery, mass and c-store, suggesting its investment into enhanced distribution is on track.
Given these positive results, the company will continue to pursue its shopping spree with the CEO noting during the company’s most recent quarterly call in the fall that the acquisition pipeline remains robust with strategic and accretive opportunities.