Hershey to Acquire Two Manufacturing Facilities from Weaver Popcorn Manufacturing

Rhea-AI Summary

The Hershey Company (NYSE: HSY) announced on April 17, 2023, a definitive agreement to acquire two manufacturing plants from Weaver Popcorn Manufacturing. This strategic move aims to enhance the supply chain capabilities for Hershey's SkinnyPop brand, which has seen significant growth, being the top retail sales leader in ready-to-eat popcorn over the past three years. The acquisition includes facilities located in Bethlehem, Pennsylvania, and Whitestown, Indiana, and is expected to provide increased flexibility, agility, and resilience in Hershey’s salty snacks supply chain. The transaction will be funded via cash on hand and short-term borrowings, subject to regulatory approvals.

Positive

• Acquisition of two manufacturing plants strengthens supply chain for SkinnyPop brand.
• SkinnyPop leads in retail sales growth in the ready-to-eat popcorn category.
• Increased operational flexibility and agility expected from new facilities.

Negative

• None.

Enables Sustained Growth for SkinnyPop brand through Supply Chain Expansion

HERSHEY, Pa., April 17, 2023 /PRNewswire/ -- The Hershey Company (NYSE: HSY) today announced it has entered into a definitive agreement to acquire two manufacturing plants from Weaver Popcorn Manufacturing, a recognized leader in popcorn production and co-packing, and a co-manufacturer of Hershey's SkinnyPop brand. Through the deal, Hershey will acquire Weaver's operations in Bethlehem, Pennsylvania and Whitestown, Indiana.

The acquisition is designed to enable the company to sustain strong growth for its SkinnyPop brand by strengthening internal supply chain capabilities in combination with its network of strategic suppliers and co-manufacturers.

"Hershey has experienced tremendous growth over the past few years, stemming from a combination of successful strategy execution and an increase in more snacking occasions among consumers," said Kristen Riggs, President, Salty Snacks, The Hershey Company. "In fact, SkinnyPop has been number one in retail sales growth for ready-to-eat popcorn over the last three years."

As the company continues to elevate its position as a leading snacking powerhouse, these new facilities will also enable more flexibility, agility and resiliency across its growing salty snacks supply chain network. A year ago, Hershey acquired Pretzels, Inc. to expand its salty snacks manufacturing capabilities.

"In response to consumer snacking trends, we continue to evolve our supply chain, making significant investments in the size, scale and capabilities of our network, improving resiliency while we continue to strengthen existing supplier relationships," said Jason Reiman, Chief Supply Chain Officer, The Hershey Company. "Our acquisition of Weaver's two facilities is a perfect example of how we're investing to bring added capacity and strength across our portfolio of brands well into the future."

Like Hershey, Weaver has a strong manufacturing heritage, tracing its roots back nearly a century. As a family-owned and operated company, over the last 90+ years, Weaver has developed into a vertically integrated business, delivering a broad array of popcorn products globally. The company now operates three independent entities, including Weaver Popcorn Manufacturing.

"Participating in the growth of SkinnyPop has been a rewarding experience for our team members," remarked Jason Kashman, Chief Executive Officer, Weaver Popcorn. "Hershey is acquiring two best-in-class popcorn manufacturing operations that will enable continued growth in volume and quality, with teams at each location that have an unrivaled expertise."

The acquisition is subject to customary regulatory approvals and will be financed with cash on hand, as well as short-term borrowings.

Safe Harbor Statement
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Many of these forward-looking statements can be identified by the use of words such as "anticipate," "assume," "believe," "continue," "estimate," "expect," "forecast," "future," "intend," "plan," "potential," "predict," "project," "strategy," "target" and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will" and "would," among others. These statements are made based upon current expectations that are subject to risk and uncertainty. Because actual results may differ materially from those contained in the forward-looking statements, you should not place undue reliance on the forward-looking statements when deciding whether to buy, sell or hold the company's securities. Factors that could cause results to differ materially include, but are not limited to: the ability to timely satisfy the conditions to the closing the transactions contemplated in the definitive agreement; our ability to realize the benefits of the transaction; risks related to the impact of the coronavirus global pandemic ("COVID-19") on our business, suppliers, distributors, consumers, customers, and employees; the scope and duration of the pandemic; government actions and restrictive measures implemented in response to the pandemic, including the distribution of vaccinations and continuation of social distancing guidelines and stay at home orders; disruptions or inefficiencies in our supply chain due to the loss or disruption of essential manufacturing or supply elements or other factors; issues or concerns related to the quality and safety of our products, ingredients or packaging, human and workplace rights, and other environmental, social or governance matters; changes in raw material and other costs, along with the availability of adequate supplies of raw materials; the company's ability to successfully execute business continuity plans to address the COVID-19 pandemic and resulting changes in consumer preferences and the broader economic and operating environment; selling price increases, including volume declines associated with pricing elasticity; market demand for our new and existing products; increased marketplace competition; failure to successfully execute and integrate acquisitions, divestitures and joint ventures; changes in governmental laws and regulations, including taxes; political, economic, and/or financial market conditions; risks and uncertainties related to our international operations; disruptions, failures or security breaches of our information technology infrastructure; our ability to hire, engage and retain a talented global workforce, our ability to realize expected cost savings and operating efficiencies associated with strategic initiatives or restructuring programs; complications with the design or implementation of our new enterprise resource planning system; and such other matters as discussed in our Annual Report on Form 10-K for the year ended December 31, 2022. All information in this press release is as of April 17, 2023. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations.

About The Hershey Company
The Hershey Company is headquartered in Hershey, Pa., and is an industry-leading snacks company known for bringing goodness to the world through its iconic brands, remarkable people and enduring commitment to help children succeed. Hershey has approximately 19,000 employees around the world who work every day to deliver delicious, quality products. The company has more than 100 brand names in approximately 80 countries that drive more than $10 billion in annual revenues, including such iconic brand names as Hershey's, Reese's, Kit Kat®, Jolly Rancher and Ice Breakers, and fast-growing salty snacks including SkinnyPop, Pirate's Booty and Dot's Homestyle Pretzels.

For more than 125 years, Hershey has been committed to operating fairly, ethically and sustainably. Hershey founder, Milton Hershey, created Milton Hershey School in 1909 and since then the company has focused on helping children succeed.

To learn more visit www.thehersheycompany.com.

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SOURCE The Hershey Company

FAQ

What is the significance of Hershey's acquisition of Weaver Popcorn Manufacturing?

The acquisition will enhance Hershey's supply chain capabilities for the SkinnyPop brand, enabling sustained growth and increased operational efficiency in response to consumer snacking trends.

When was the acquisition of Weaver Popcorn Manufacturing announced?

The acquisition was announced on April 17, 2023.

How will Hershey fund the acquisition of Weaver Popcorn Manufacturing?

The acquisition will be financed using cash on hand and short-term borrowings.

Where are the manufacturing plants located that Hershey is acquiring?

The manufacturing plants are located in Bethlehem, Pennsylvania, and Whitestown, Indiana.

How does this acquisition impact Hershey's market position?

This acquisition is expected to solidify Hershey's leading position in the snacking market by improving supply chain resilience and capability.