Utz Brands, Inc. is selling the R.W. Garcia and Good Health brands to snack manufacturer Our Home for about USD182.5m, along with three manufacturing facilities.
R.W. Garcia makes tortilla chips, while Good Health sells a range of snack options, such as vegetable chips, popcorn, puffs, fries, and pretzels. The three production sites are located in Nevada, Pennsylvania, and North Carolina.
“We expect these transactions to deliver on our supply chain transformation and value creation initiatives, to fast-track our deleveraging timeline by a full year, and to accelerate our brand portfolio strategy to better optimize for growth,” Utz Brands CEO Howard A. Friedman said. “With this important step in the optimization of our supply chain and brand portfolio, together with immediate benefits to free cash flow from lower interest expense, we are well-positioned to execute against our expansion plans across the US and deliver on our margin target.”
According to the company, Utz plans to utilize the roughly $150 million in after-tax net revenues from the sale to settle its long-term debt. Based on the company’s current outlook for interest rates, the debt reduction is expected to reduce interest expense by approximately $12 million in fiscal 2024. Additionally, Utz’s plan to achieve its target of approximately 3.0-times net leverage will be accelerated by a full year, from the end of fiscal 2026 to the end of fiscal 2025.
Find out more at: https://www.utzsnacks.com/