The Hershey Company’s $420 Million Acquisition of Pirate’s Booty

Ropes & Gray and Dechert LLP advised on the deal

The Hershey Company (NYSE:HSY) and B&G Foods, Inc. (NYSE:BGS) have entered into a definitive agreement for Hershey to acquire Pirate Brands, including the Pirate’s Booty, Smart Puffs and Original Tings brands.

This strategic acquisition is expected to be accretive to Hershey’s financial targets given the strong growth trajectory and solid margin structure of the Pirate Brands business. Pirate’s Booty is a fast-growing brand in the more than $2.5B cheese puffs category, with retail sales up over 8% on a year-over-year basis, and a market leader for consumers seeking snacks with clean labels and no artificial flavors, colors or preservatives.

Pirate Brands will operate within Amplify, Hershey’s better-for-you snacking hub in Austin, Tx., which is focused on driving growth in the warehouse snacking aisle with unique product flavors and forms like Skinny Pop, Paqui and Oatmega.

The Pirate Brands purchase price is $420 million, or approximately $360 million net of tax benefits. The transaction will be financed with cash on hand as well as short-term borrowings. The transaction is expected to close in the fourth quarter of 2018, subject to customary regulatory approvals and other closing conditions.

Ropes & Gray advised The Hershey Company with a team including Neill Jakobe (Picture), mergers & acquisitions partner Paul Scrivano, tax partner Aaron Harsh, IP transactions partner Edward Black and life sciences partner Kellie Combs.

Dechert LLP advised B&G Foods, Inc. with a team led by corporate partner Stephen Leitzell and including corporate partners Sarah Gelb and John LaRocca; antitrust partner James Fishkin; tax partner Edward Lemanowicz; corporate associates Michael Darby and Kenneth Winterbottom; and tax associate George Davis.

Involved fees earner: Stephen Leitzell – Dechert; Sarah Gelb – Dechert; John LaRocca – Dechert; Michael Darby – Dechert; Kenneth Winterbottom – Dechert; James Fishkin – Dechert; Edward Lemanowicz – Dechert; George Davis – Dechert; Neill Jakobe – Ropes & Gray; Paul Scrivano – Ropes & Gray; Aaron Harsh – Ropes & Gray; Edward Black – Ropes & Gray; Kellie Combs – Ropes & Gray;

Law Firms: Dechert; Ropes & Gray;

Clients: The Hershey Company; B&G Foods Inc.;

Author: Ambrogio Visconti