Utz acquisition (UTZ)
Utz brands announced the acquisition of RW Garcia yesterday for $56M. RW Garcia is a family-owned and operated artisan maker of high-quality organic tortilla chips, crackers, and corn chips. With manufacturing facilities located in Nevada and North Carolina, RW Garcia has a significant production capacity to support the continued growth of the Utz portfolio of brands. RW Garcia is complementary to Utz’s June 2021 acquisition of Michigan-based Festida Foods.
RW Garcia generated net sales and adjusted EBITDA of approximately $66.2 million and $5.8 million, respectively. The transaction represents an acquisition multiple of approximately 9.6x RW Garcia Adjusted EBITDA of $5.8 million excluding synergies and an acquisition multiple of 5.7x including expected run-rate cost synergies of approximately $4.0 million. Utz expects the transaction to be accretive to earnings in fiscal 2022 and beyond. UTZ’s CEO said, “We expect this strategic acquisition will enable strong supply chain synergies, enhance our ability to expand distribution of our existing brands, and supplement our better-for-you product portfolio.” Utz said it would use cash and its revolver to finance the transaction.
Texas on-premise alcohol beverage tax receipts recover (SAM)
Texas reports its alcoholic beverages sales tax receipts monthly. In October, alcoholic beverage receipts increased 46.6% YOY. Compared to September, receipts increased 6.2% month over month, as seen in the chart below. October 2021 was also 11.1% higher than October 2019. In Texas, bars were shut down in mid-March 2020 and allowed to re-open on May 22. In late June, bars were shut down again, then re-opened again in October by the county. Bars were also allowed to reclassify as restaurants since June as long as food sales exceeded alcohol sales.
Black Rifle Coffee (SBEA)
Black Rifle Coffee is going public through a SPAC merger. The transaction with SilverBox Engaged Merger Crop I values the company at $1.7B. Black Rifle will raise $100M through a PIPE alongside the merger. Engaged Capital, a backer of SilverBox Engaged, will also invest $100M. Former Green Beret Evan Hafer founded black Rifle. Black Rifle commits to hiring military veterans, and about half the employees have worked in the armed forces. The company expects to reach $230M in sales this year, representing 40% growth. Most of the sales are online. Evan Hafer has tried to keep the company’s social causes away from politics and instead focused on veterans' issues.
