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To acquire Texas-based snack company for $1.6B

To acquire Texas-based snack company for $1.6B

Hershey Co (NYSE:HSY) announced on Monday that it's making a key acquisition in the snack foods space.

Hershey rejected a US$23 billion bid previous year from Oreo cookie owner Mondelez, as the Hershey Trust, which can veto a deal, was embroiled in a row with its overseer that resulted in departures at the trust and Hershey's board.

"Hershey's snack mix and meat snacks products, combined with Amplify's Skinny Pop, Tyrrells, Oatmega, Paqui and other global brands, will allow us to capture more consumer snacking occasions by creating a broader portfolio of brands". Under terms of the deal, Hershey will pay $12.00 in cash for each Amplify share outstanding, which is 71.4% above Friday's closing price of $7.00. Annual rum-rate synergies of approximately $20 million also are expected to be generated over the next two years from cost savings and portfolio optimization, the company said.

Amplify brands include Skinny Pop popcorn, Oatmega grass-fed whey protein cookies, Paqui non-GMO chips and Tyrrell's hand-cooked potato chips.

Hershey Chief Executive Officer Michele Buck called the transaction "an important step in our journey to becoming an innovative snacking powerhouse". "Hershey's snack mix and meat snacks products, combined with Amplify's Skinny Pop, Tyrrells, Oatmega, Paqui and other worldwide brands, will allow us to capture more consumer snacking occasions by creating a broader portfolio of brands".

J.P. Morgan Securities LLC and Morgan Stanley & Co LLC were financial advisers to Hershey, while Jefferies LLC advised Amplify.

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