Hershey Co HSY is known for its line of chocolate bars, but the company is looking to expand its presence in the nutritious snack space through the acquisition of ONE Brands.
What Happened
Hershey said in a press release it reached an agreement to acquire ONE Brands, a maker of low-sugar, high-protein and nutritious snacks. ONE Brands's core purpose is to offer consumers snacks with "exceptional taste, texture and ingredients with zero compromises and even fewer regrets."
Hershey will pay $397 million, or around $325 million net of tax benefits. Hershey will finance the transaction with a combination of cash on hand and short-term borrowings.
Why It's Important
Hershey's prior acquisitions in the healthy snack segment includes the 2018 purchase of Amplify Snack Brands and a recent investment in vitamin-fortified snack market FULFIL Holdings. Under Hershey's umbrella, ONE Brands' portfolio of snacks with flavors like Peanut Butter Pie and Birthday Cake will give "more snacking choices for more consumers," Mary Beth West, Hershey's Chief Growth Officer, said in the press release.
Hershey's acquisition is expected to close by the end of 2019 and remains subject to standard regulatory approvals and other closing conditions. Hershey's expects ONE Brands to be slightly accretive to earnings in its first full year post closing.
Hershey's stock closed Tuesday at $159.389 per share.
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