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Utz, maker of Zapp’s and Boulder chips, is going public

Shares of Utz Brands — owner of snack brands such as Golden Flake, Tim’s and Boulder Canyon — are scheduled to start trading Monday on the New York Stock Exchange under the ticker symbol “UTZ.”

A move to the public markets will allow Utz to expand its collection of regional brands more broadly, said Utz CEO Dylan Lissette, who has worked at the company since 1995 and whose wife, Stacie Rice, is a fourth-generation member of the founding family.

“We’re fourth-generation going into fifth, about a billion dollars, and we were getting to 100 years and have done a fair amount of acquisitions,” Lissette said in an interview with CNN Business. “All of those things just came together, and it really made sense.”

Utz’s roots stretch back to 1921 in Hanover, Pennsylvania, where Bill and Salie Utz started a potato chip company called Hanover Home Brand Potato Chips. The Utz brand, featuring the iconic red-bowed “Little Utz Girl” logo, would expand throughout the Northeast in the following decades.

After a 2009 merger fell through with hometown snack rival Snyder’s of Hanover, Utz went in a different direction for growth. Rather than becoming the Budweiser of the pretzels and chips business, Utz leaned into buying up brands more akin to the “craft beer” side of things.

During the past decade, Utz amassed a collection of regional snack brands that have attracted cult-like acclaim, and included products such as Zapp’s New Orleans Kettle Style “Voodoo” chips, Boulder Canyon Malt Vinegar & Sea Salt chips, Hawaiian Brand Sweet Maui Onion chips, and Golden Flake Sweet Heat Barbecue chips.

Nearly a dozen deals later Utz is the fourth-largest salty snack brand with annual sales expected to hit $950 million, said Brian Holland, a D.A. Davidson analyst who initiated coverage on Utz.

Salty snacks remain a consumer favorite — people spent $25 billion on them in 2019, up 5.3% over the prior year, according to Euromonitor International data. The category has seen a healthy boost during Covid-19, as sales are projected to top $28 billion for 2020, according to Euromonitor.

But the category is crowded, and Utz plays fourth fiddle to PepsiCo (PEP), Campbell and Kellogg. PepsiCo, via its Frito-Lay subsidiary, holds a “lordly share,” or 60% of salty snacks, Holland said, adding the firm could wield significant influence on pricing and promotions, making it harder for smaller companies like Utz to keep up.

Regardless, Utz has significant potential as consumers gravitate toward familiar and nostalgic brands during this time, and the regional favorites could play well with broader national expansion, he added.

Utz’s path to Wall Street began last year when it struck up talks with Collier Creek Holdings (CCH), an investment firm formed in 2018 by former Pinnacle Foods and Kraft (KHC) executives with the purpose of buying up consumer goods companies. Earlier this summer, the publicly-traded Collier said it would merge with Utz, contributing $488 million in cash. Following the deal’s completion, the Rice and Lissette family will retain majority ownership of the company’s stock, and Dylan Lissette will continue to lead Utz.

The lion’s share from Collier — about $376 million — will pay off about half of the debt that Utz accumulated during its acquisition spree in the 2010s.

By cutting its debt in half, Utz will be in a stronger financial position to compete and invest in future growth, Lissette said, noting that the company’s primary goals are boosting its marketing efforts, expanding distribution and perhaps acquiring a couple of regional snack brands along the way.

“We would expect that [consumers] will see more of us, hear more of us,” he said.

Read More: Utz, maker of Zapp’s and Boulder chips, is going public

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