Hershey says pretzel deals are next step to becoming snacking behemoth: WSJ

Hershey Co.’s $1.2 billion acquisition of Dot's Pretzels LLC and Pretzels Inc., a Dot's co-manufacturer, is expected to establish the chocolate company as a larger player in the snacks category. Hershey chief financial officer Steve Voskuil told the Wall Street Journal that the acquisitions provide the company with its first in-house pretzel manufacturing capabilities, which will also create cost efficiencies for its other pretzel brands.

Voskuil told WSJ that the deals give Hershey additional pretzel, add that Hershey has is working to diversify its business beyond candy and chocolate as consumers lean toward healthier snacks. Additionally, he said the deals would add some cost synergies in procurement and in sourcing. “But the deal is more about unlocking growth,” the CFO told the newspaper.

Dot’s, whose main brand is Dot’s Homestyle Pretzels, and Pretzels Inc., which operates three production plants, generated a combined $275 million in estimated aggregate net sales during the 12 months ended in September, the Journal reported.

The WSJ observed that the Pretzel deals come at a time of record mergers and acquisitions. Transactions involving U.S. businesses added up to $2.26 trillion as of Nov. 16, almost double the amount during the prior-year period, according to data provider Refinitiv.

Click here to see the article in the newspaper's CFO Journal section.