Hershey Plans to Acquire Pretzels Inc.

Hershey Plans to Acquire Pretzels Inc.

The Hershey Company (NYSE: HSY) announced it has entered into a definitive agreement to acquire Pretzels Inc. from an affiliate of Peak Rock Capital, a private investment firm with numerous investments in the food and beverage industry.

Pretzels Inc. is a co-manufacturer of pretzels for Dot’s Pretzels and several other customers and is a leading innovator in the pretzel category. Based in Bluffton, Indiana, Pretzels Inc. operates three manufacturing locations in Indiana and Kansas.

The Hershey Company will also be acquiring Dot’s Pretzels LLC, the owner of Dot’s Homestyle Pretzels, the fastest-growing scale brand in the pretzel category.

When the transactions are completed, these three manufacturing locations would be in addition to four pretzel-seasoning facilities to be acquired with Dot’s. The acquisition of Pretzels Inc. would give Hershey deep pretzel category and product expertise and the manufacturing capabilities to support Dot’s growth and future pretzel innovation as well as the continued growth in the entire pretzel category through Pretzels Inc.’s leading co-manufacturing capabilities.

“Pretzels Inc. will help us expand Hershey’s snacking and production capabilities while keeping the special connection to Dot’s,” added Buck. “It will be important as we continue to grow this already fast-growing brand and create new products in the broader pretzel category.”

The total purchase price for these two proposed acquisitions is approximately $1.2 billion, or approximately $1 billion of investment net of expected future tax benefits. It will be financed with cash on hand as well as short-term borrowings. The estimated aggregate net sales for the two businesses were approximately $275 million for the 12 months ended September 2021. The combination of these two strategic acquisitions is expected to be slightly accretive to reported earnings per share in 2023 and adjusted earnings per share in 2022. The acquisitions are subject to customary regulatory approvals and are expected to close by the end of 2021.

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