Hershey Co (HSY) Will Buy Amplify Snack Brands For About $1.6 Billion

Tyrrells could change hands

Tyrrells could change hands

The chocolate maker said it will acquire all of the outstanding shares of Amplify Snack Brands, Inc. for $12.00 per share.

"Hershey's snack mix and meat snacks products, combined with Amplify's Skinny Pop, Tyrrells, Oatmega, Paqui and other worldwide brands, will allow us to capture more consumer snacking occasions by creating a broader portfolio of brands", said Michele Buck, The Hershey Company President and Chief Executive Officer, in a statement.

Amplify, based in Austin, .

For Amplify, Hershey's experience with category management at the retail level will give it added distribution clout.

Amplify Snack Brands, which itself acquired Tyrrells for £300 million previous year, is thought to have become a target of Hershey off the back of a growing USA snacks market, according to CNBC. Hershey will also incur a make-whole payment of $76 million related to a tax receivable agreement that Amplify entered into when it went public in 2015. Amplify's shares were at $11.96 in premarket trading, while Hershey fell 1 percent to $113.

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Hershey will fund the transaction with cash on hand, along with some new debt.

The acquisition is not expected to affect the previously announced full year 2017 outlooks provided in Hershey's and Amplify's third quarter earnings release and conference calls.

Under the transaction, which is subject to the approval of Amplify's shareholders, Hershey would pay $12 per share for Amplify's outstanding stock.

Hershey is behind Reese's Peanut Butter Cups and Hershey's Kisses, and the deal values Amplify at 12 U.S. dollars (£8.98) a share, a 71% premium to Friday's closing price.

Hershey expects a +1.25 rise in net sales for 2017 of around $7.49bn, while Amplify anticipates net sales of $375m to $379m in fiscal 2017.

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