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Specialty snack maker Amplify Snack Brands (BETR) agreed to be acquired by the Hershey Company for $12/share, a 71% premium over Friday’s closing price of $7/share. With the overall food industry showing stagnant growth, snack companies like Amplify offer the food giants a rare opportunity to participate in a rapidly-growing segment.
We highlighted Amplify as a strong turnaround candidate in October (“Amplify Snack Brands Worthy of a Nibble”), describing how its stock had fallen nearly 60% from its October 2015 initial public offering price of $18, to its then-current price of $7.23.
Amplify’s weak share price caught our attention—we became much more interested as it offered a combination of real value with significant positive changes. Its emphasis on “Better-for-You” snacks with allergen-free and GMO-free ingredients, led by SkinnyPop, the nation’s #2 ready-to-eat popcorn brand, provided a strong and growing $400 million revenue base. With a controlling stake held by private equity firm TA Associates, the company had a patient and experienced owner that helped bring in several highly capable senior leaders to accelerate its growth.
For shareholders of Amplify, the acquisition by Hershey’s is a sweet deal right in time for the Holidays.