Is the future of junk food a lot less junky? Manufacturing giant the Hershey Company is banking on it. Today, the candymaker announced a deal to purchase Austin-based Amplify Snack Brands, the maker of homegrown brands like SkinnyPop, Paqui, and Oatmega.
The $1.6 billion acquisition, which includes $920 million in cash and the assumption of debt and tax liabilities, will allow Hershey to further expand past its legacy brands. The products in Amplify’s portfolio are marketed as alternatives to traditional snack foods, with an emphasis on greater transparency and premium ingredients.
As consumer tastes shift, Hershey has increasingly been interested in this sector of the market. It acquired Sonoma-based meat jerky manufacturer Krave in 2015 and has developed brands like Sofit and Popwell that compete in the “better-for-you” market.
“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,” Hershey CEO Michele Buck said in a statement.
The deal still requires approval from regulatory agencies and shareholders, but Amplify’s largest shareholder — TA Associates — has already given the stamp of approval. Hershey expects the acquisition to be finalized by the first quarter of 2018.