The acquisition will bring health conscious snack brands such as Original Tings, Pirate’s Booty, and Smart Puffs to its portfolio.
Hershey Co disclosed its all-cash deal wherein it would be acquiring Pirate Brands from B&G Foods Inc for $420 million.
The deal will provide Hershey the rights to snack brands including Original Tings, Pirate’s Booty, and Smart Puffs.
According to a statement from the chocolate maker, the deal is expected “to be accretive” to Hershey’s financial targets as the company delves deeper into the $2.5 billion plus cheese puffs market.
In a strategic move, Hershey has been increasingly diversifying its business by adding more snacks to its portfolio since American consumers are opting for healthier snacks over chocolates and sugary candies.
In 2017, the Kisses chocolate maker acquired the Amplify Snack Brands for $921 million, which again was aimed at expanding its offerings and added products such as Paqui tortilla chips and SkinnyPop popcorn to its repertoire.
In 2015, Hershey acquired beef jerky maker Krave.
B&G Foods purchased Pirate Brands in 2013.
B&G Foods said it would use the net proceeds from the sale for repaying its long-term debt and funding possible acquisitions.
Hershey intends to finance the transaction with cash reserves as well as short-term borrowings and expects the deal to close in the fourth quarter of 2018.