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Utz Becomes The Latest SPAC Target

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Utz Quality Foods was founded in 1921 as "Hanover Home Brand Potato Chips" by William and Salie Utz with an investment of $300.

Utz's variety of potato chips and pretzels has made it the largest independent, privately held snack food brand in the United States. Utz expects to generate net sales of $932 million this year.

After nearly 100 years as a family-owned business, Utz is finally going to become a publicly-traded company on the New York Stock Exchange. As you may have guessed, it's doing so through a merger with special purpose acquisition company Collier Creek Holdings to form Utz Brands. Collier Creek was formed in 2018 by former executives from Pinnacle Foods and Kraft to acquire consumer goods companies.

"Our partnership with Utz brings together the financial and human capital of Collier Creek with an exceptional 100-year-old company that has significant competitive advantages and runway for profitable growth," Collier Creek co-founder Roger Deromedi said. "Utz is an iconic company with a strong portfolio of beloved snack brands, growing positions in the salty snack category, and a competitively advantaged manufacturing and distribution network."

After nearly a dozen acquisitions over the last decade, Utz has become the fourth-largest brand in the salty snack category, according to D.A. Davidson analyst Brian Holland. However, PepsiCo, Campbell and Kellogg continue to largely dominate the salty snack category with PepsiCo alone holding a nearly 60% market share through its Frito-Lay subsidiary.

According to Euromonitor International data, $25 billion was spent on salty snacks in 2019, marking an increase of 5.3% from the previous year. Euromonitor predicts sales will top $28 billion this year as the category has benefitted from COVID-19.

The Utz family, which is estimated to be worth $1 billion, is selling about 10% of its shares and will own 50% of Utz Brands shares as a result of the deal.

"The family is taking very little out of the business with us going public," Utz CEO Dylan Lissette said. "It's a family business, but the mentality has always been, take care of the business and the business will take care of the family. The alternative is we end up sold to somebody, someday."

Utz begins trading today under the ticker "UTZ." Deromedi, who formerly formerly served as chairman of Pinnacle Foods and CEO of Kraft Foods, will serve as chairman of the company.

With the SPAC boom showing no signs of slowing down, Utz may not be the last company that's been privately-held for decades to capitalize on the opportunity and go public.

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