Utz Brands, Inc. (NYSE: UTZ) declared Tuesday that its units have inked a definitive agreement with Great Lakes Festida Holdings, Inc., and related entities, to buy all of the assets, including the real estate located in Grand Rapids, MI, related to the operation of Festida Foods. Festida Food has gained recognition as a prominent manufacturer of tortilla chips, corn chips, and pellet snacks, etc.
Furthermore, after eradicating tolling fees between Festida Foods and Utz subsidiaries, Festida created incremental FY 2020 Net Sales and Adjusted EBITDA of nearly $14 million and $6 million, respectively. Moreover, the firm is anticipating getting nearly $5 million net present value from predictable tax benefits resulting from the deal and to get run-rate Selling and Administrative cost synergies of at least $1 million. The deal is anticipated to be profitable to earnings in 2021 and beyond.
As per the terms of the deal, the assets and certain operating liabilities of Great Lakes Festida Holdings, Inc. and the real estate kept by an associated entity will be purchased by holdings of Utz. The firm anticipates drawing on its revolving credit facility to finance the $41 million cash buying price. The total buying price is $41 million and is dependent on expected buying price regulations.
Furthermore, this deal is beneficial for the RMS as well because Utz Brands shares a belief in a strong firm culture that both assists and urges member development. This factor made them a strong partner for Festida Foods.