Utz to pay $135M, $12/share, for Golden Flake chips

Utz Quality Foods Inc., the family-owned. Hanover, Pa.-based potato chip and snack food company, has agreed to pay around $135 million, or $12 a share, for Golden Enterprises, Inc., the publicly-traded, Birmingham, Alabama-based maker of Golden Flake chips and other snack products, which has lately traded around $7 a share.

Snacks "are a very competitive market," and "our number one goal is to remain relevant, in a geography that has expanded," with foreign competitors seeking to purchase local U.S. brands.

Utz, controlled by Hanover's Rice family (Lissette's wife is a Rice), has expanded steadily by acquisition since cancelling a merger with Snyder's of Hanover in 2009.

Since then, "strategic opportunities have come our way," both for regional chip brands North and South, and for "better-for-you" and niche-brand snacks, Lissette said. The company says it has also boosted sales for its original brands.

In 2011, Utz bought Zapp's and "Dirty" potato chips, and upgraded the Lousiana-based plant that sells those chips; Wachusett, in Massachusetts; and the Reading, Pa.-based Bachmann and Jax Cheese Curls brands, which Utz moved, with production equipment, to its Hanover plant, preventing what Lisette said might have been "the brand's demise."

The Reading plant remains open under the management of Savor Street Foods, making private-label pretzels.

Utz has also acquired GoodHealth brands, including "Veggie Straws & Chips," , and kettle-cooked chips fried in avocado and olive oil.

Utz was founded in 1921 by William and Salie Utz. Golden was founded two years later by Frank Mosher and his partners, and sold in 1946 to the Bashinsky family, which remained the largest shareholders after taking Golden public in the early 1980s.

Golden Flake, which calls its product "The South's Original Potato Chip," will operate "as a separate subsidiary under the leadership of its current management team" in Birmingham, Utz said in a statement.

The deal faces federal antitrust approval and is scheduled to close before the end of the year. Bashinsky family trusts have already approved the deal, pending a three-day window for rival bids.  North Point Advisors, LLC and Sirote & Permutt, PC counseled directors on Golden's board.  Bankers at New York-based Sandler O'Neill + Partners and lawyers at Cozen O'Connor of Philadelphia advised Utz.