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 of 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 United States and certain other international markets.
The transaction represents an acquisition multiple of approximately 9.2 times the estimated adjusted EBITDA of Truco for fiscal 2020 of $ 50 million, excluding estimated synergies, and 8.4 times the estimated adjusted EBITDA of Truco for the fiscal year 2020, including cost synergies of at least $ 5 million.
Utz Quality Foods expects the transaction to generate profits in 2021 and beyond. The transaction is expected to close this month and is subject to customary closing conditions, including receipt of regulatory approvals.
Utz plans to use its sales, manufacturing and distribution platform to expand tortilla chips, salsa and On The Border queso into channels where the brand is under-penetrated, including grocery and convenience. , and to increase investments in marketing and innovation behind the brand.
Utz expects Truco Enterprises to generate net sales of around $ 195 million in fiscal 2020, an increase of around 32% from the previous year.