In a step to further transform its product portfolio, The Hershey Co. (HSY, Financial) announced Monday it is buying popcorn maker Amplify Snack Brands Inc. (BETR, Financial) for $1.6 billion.
According to the terms of the deal, the chocolate company will pay $12 a share for the parent company of Skinny Pop popcorn. The deal is expected to be accretive to earnings per share in the first year following its close. In addition, it is projected to generate approximately $20 million in annual run-rate synergies over the next two years.
Hershey President and CEO Michele Buck said the acquisition is an important step in its “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 international brands, will allow us to capture more consumer snacking occasions by creating a broader portfolio of brands," she said.
Amplify President and CEO Tom Ennis said the combination will help continue its mission of providing consumers with “great-tasting snacks made with the best ingredients possible.”
“Hershey is a great cultural partner for Amplify and I'm excited for our team who will have access to Hershey's marketing and go-to-market resources to take our brands to the next level," he continued.
The deal is expected to close in the first quarter of 2018.
Hershey’s stock rose 0.43% following the announcement while Amplify’s shares skyrocketed 70%. GuruFocus estimates Hershey’s has gained 11% year to date while Amplify has gained 36%.
Disclosure: I do not own any stocks mentioned.
