Utz CEO Dylan Lissette joins “Squawk Box” to discuss the company’s decision to go public through a SPAC after nearly 100 years as a private company.
Utz Quality Foods gained market share as consumers stockpiled its pretzels and potato chips for quarantine snacks at the start of coronavirus lockdowns, helped by its direct-store delivery model.
“Our path from manufacturing to putting it on the shelf is very fast. It can literally happen in 24 to 48 hours, depending on the geography,” said CEO Dylan Lissette, the son-in-law of the founders’ grandson.
The company’s pro forma net sales grew 11% to $242 million during the quarter ended June 28 and it grabbed market share from competitors. It also benefited from lower exposure to food service outlets, like restaurants and university dining halls, and convenience stores.
Like PepsiCo and other snack companies, Utz had to rethink some of the products it’s making during the pandemic, like variety packs that would require workers to be closer together in factories. In the coming months, it plans to spend more on advertising and marketing to help it retain its new customers.
Utz, which has been family owned for 99 years, is the latest company to go public this year through a deal with a special purpose acquisition company, joining the likes of Virgin Galactic and DraftKings. A SPAC, as they are commonly called, has no assets but use the proceeds from an initial public offering, combined with bank financing, to buy and take privately held consumer companies public.
The soon-to-be formed Utz Brands will begin trading Monday on the New York Stock Exchange with the ticker “UTZ.” Lissette said that Utz started talking with Collier Creek Holdings, which has ties to investment firm CC Capital, in July of last year about a merger.
“As we looked at the landscape and understood that we really wanted to not just be a company that dotted along. We wanted to be a growth company, a national company. We want to compete against the largest CPG competitors in the salted snack industry,” Lissette said.
Utz’s merger with Collier Creek, which is trading for about $15.85 a share, is expected to close on Friday. Collier Creek co-founder Roger Deromedi, who formerly served as chairman of Pinnacle Foods and CEO of Kraft Foods, will become chairman of the company.
“What I liked about the combination with Collier — it was really about taking a proven playbook, not just business strategies but also governance strategies,” Lissette said.
Proceeds from the deal will go toward paying down Utz’s debt. Last year, it bought rival pretzel-maker Snyder of Berlin from Conagra Brands. After the merger with Collier Creek closes, the Rice and Lissette family will retain its 90% stake in Utz, which will represent more than 50% of the company.