Vending

Utz Quality Foods to acquire On The Border tortilla brands

Image courtesy of Utz Quality Foods LLC.

December 4, 2020

Utz Quality Foods LLC and Heron Holding Corp. are acquiring Truco Enterprises, a seller of tortilla chips, salsa and queso under the On The Border brand from Insignia Capital Group for $480 million, according to a press release. The acquisition includes all rights to the On The Border trademarks for use in the manufacture, sale and distribution of snack food products in the U.S. and certain other international markets.

The transaction represents an acquisition multiple of approximately 9.2 times estimated fiscal 2020 Truco Adjusted EBITDA of $50 million excluding estimated synergies, and 8.4 times estimated fiscal 2020 Truco adjusted EBITDA including run-rate cost synergies of at least $5 million.

Utz Quality Foods expects the transaction to be accretive to earnings in 2021 and beyond. The transaction is expected to close this month and is subject to customary closing conditions including the receipt of regulatory approvals.

Utz plans to use its sales, manufacturing, and distribution platform to expand On The Border tortilla chips, salsa and queso further into channels where the brand is under-penetrated, including grocery and convenience, and to increase marketing and innovation investments behind the brand.

Utz expects Truco Enterprises to generate approximately $195 million in net sales in fiscal 2020, an increase of approximately 32% compared to the prior year.