Utz Brands is adding yet another company to its pantheon of snack food brands.
The publicly traded, Hanover-based company announced on Thursday that its subsidiaries, Utz Quality Foods and Heron Holding Corp., entered into a definitive agreement to acquire Truco Enterprises for $480 million. Truco, currently owned by Insignia Capital Group, is the Carrollton, Texas-based manufacturer of the On The Border brand of tortilla chips, salsa and queso.
The acquisition is expected to close in December and would give Utz the opportunity to grow its stake in the expanding tortilla chip subcategory with a brand considered the third best earner in the space, said Dylan Lisette, CEO of Utz.
The company noted that the $6.2 billion retail sales tortilla chip subcategory is the second largest of the subcategories for salty snacks with tortilla chip retail sales growing by 10% in the last year.
“In combination with our small but growing premium Tortiyahs! brand, the integration of the On The Border brand will continue to improve Utz’s scale and product diversification, which are important success factors in salty snacks,” Lisette said. “This acquisition strengthens our competitive position, as well as our financial profile. We are confident this transaction will drive long-term value creation for our stockholders and help position us for continued long-term growth.”
Acquiring On The Border would also make Utz a player in the growing $1.5 billion retail sales salsa and the $107 million retail sales queso subcategories.
Earlier this month, Utz reported strong financial results in its first quarter as a public company after merging with Collier Creek Holdings in August. In the third quarter of 2020, Utz Brands saw a gross profit of $86.2 million, an increase of $16.4 million over the same period last year.
The company’s brand portfolio includes Utz, Zapp’s, Golden Flake Pork Skins, Good Health, Boulder Canyon, Hawaiian Brand and Tortiyahs!
Shane Chambers, CEO of Truco Enterprises, said joining Utz will greatly expand its On The Border brand. “Utz will be able to leverage its world class direct-delivery network to help expand our brand into new markets.”