PepsiCo Agrees to Buy Tortilla-Chip Maker Siete Foods – WSJ
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SOURCE: Ben Dummett and Lauren Thomas | Wall Street Journal
PepsiCo agreed to acquire tortilla-chip maker Siete Foods for $1.2 billion in its latest move to bolster its offering of healthier snacks.
The Wall Street Journal previously reported that a deal was close.
The details
With Siete, PepsiCo gains access to an array of Mexican-inspired products including tortilla chips, soft tortillas, jarred enchilada mix and dairy-free queso dips.
Siete, which is based in Texas, was started by the Garza family after a family member’s health condition required switching to a grain-free diet, according to the company’s website.
More recently, the company has branched out with a slew of newer products including cookies and potato chips. Its distribution has also expanded in recent months to include Target and Kroger grocery stores.
PepsiCo faced a competitive sales process for Siete with the business drawing takeover interest from private-equity firms and other food companies.
The rationale
For PepsiCo, the deal dovetails with its focus on offering healthier snacks by lowering the amount of sodium, saturated fat and sugars in its chips. Siete sells a range of offerings, including tortillas made with almond flour.
Other recent chip-related acquisitions by PepsiCo include Bare Foods, a maker of baked fruit and vegetable snacks, in 2018 and BFY Brands, the maker of PopCorners snacks soon after.
Americans’ penchant for snacks doesn’t appear to be slowing and continues to drive dealmaking across the packaged-food industry.
Mars unveiled a nearly $30 billion deal for Pringles and Cheez-It owner Kellanova earlier this year. J.M. Smucker said it would pay $4.6 billion for Twinkie-maker Hostess Brands roughly a year ago.
Centerview Partners is acting as PepsiCo’s lead adviser. Citi is also a financial adviser to the company. Gibson Dunn & Crutcher is legal adviser to PepsiCo. Lazard is advising Siete. Its legal advisers are Weil, Gotshal & Manges, and Armbrust & Brown.
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This article was originally published on the Wall Street Journal – navigate to the original article here.
