Tyrrells owner acquired by Hershey in $1.6bn deal

By Gwen Ridler

- Last updated on GMT

Amplify Snacks, owner of Tyrrells, has been bought by US confectionery giant Hershey
Amplify Snacks, owner of Tyrrells, has been bought by US confectionery giant Hershey

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Amplify Snack Brands, owner of UK crisp manufacturer Tyrrells, has been acquired by US confectionery giant Hershey, in a deal worth about $1.6bn (£1.2bn).

Hershey agreed to buy the snack manufacturer for $12 per share, with the deal expected to close in the first quarter next year. The deal valued the company at about 14.8 times its adjusted earnings before interest, tax, depreciation and amortisation.

Michele Buck, Hershey president and chief executive, said: “"The acquisition of Amplify and its product portfolio is an important step in our journey to becoming an innovative snacking powerhouse.

“Together, it will enable us to bring scale and category management capabilities to a key sub-segment of the warehouse snack aisle.”

Amplify president and chief executive officer Tom Ennis said the transaction supported the company’s mission of creating clean label snacks.

‘Great cultural partner’

Hershey is a great cultural partner for Amplify and I'm excited for our team who will have access to Hershey's marketing and go-to-market resources to take our brands to the next level,” ​said Ennis.

The purchase followed a failed takeover bid for Hershey from rival firm Mondelēz earlier this year, reported to value to company at $125 (£93.5) per share.

Commenting on the deal, Julian Wild, partner at business consultancy Rollits, said Hershey had been under pressure to make acquisitions since rejecting the Mondelēz bid.

“The US chocolate confectionery market is not growing and Hershey has been looking for US branded snack businesses,”​ said Wild. “Amplify Snack Brands fits the bill very well.”

However, Hershey would need to make turning Tyrrells’ fortunes around a top priority, urged Wild.

‘Massively overpaid’

“Amplify massively overpaid when buying it in a £300M deal in August last year, when Tyrrells was turning over about £85M,”​ he said.

“Tyrrells has not been performing well in a very competitive UK crisps market, suffering from a move towards healthier snacks and adverse publicity around high levels of acrylamide.”

The healthy snack maker saw its profit fall to £7.3M from £13.4M in its 2016 full year results, published in October this year. Turnover for the company fell by £13.9M to £47.7M.

Tyrrells’ sale to Amplify saw previous owner Investcorp receive about £278M directly and 2.1M shares in Amplify.

Meanwhile, in September, Tyrrells completed a £2M capital investment at its factory at Leominster in Herefordshire,​ in a move designed to improve the quality of its vegetable crisps and drive growth in the category.

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