Utz Brands Announces Continued Acceleration Of Supply Chain Transformation Strategy And Completes $630M Term Loan Repricing; Utz And Our Home Will Operate Under A Transition Services Agreement For Up To 12 Months, Total Consideration For The Transactions Is $18.5M
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Utz Brands, Inc. (UTZ) has announced the sale of two manufacturing facilities to Our Home for $18.5 million, aiming to reduce long-term debt and add cash to its balance sheet. This move is part of Utz's supply chain transformation strategy, reducing its manufacturing facilities from 16 to 8 since 2021. The transactions are expected to close on April 22, 2024, and are anticipated to be accretive to Utz's Adjusted EPS in 2024. Additionally, Utz has completed a repricing of its $630 million Term Loan, reducing the interest rate and expecting to save $2 million annually in cash interest expense.
April 18, 2024 | 1:14 pm
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Utz Brands, Inc. has sold two manufacturing facilities to Our Home for $18.5 million and completed a $630 million Term Loan repricing to lower interest rates. These actions are part of its supply chain transformation strategy and are expected to be accretive to its Adjusted EPS in 2024.
The sale of manufacturing facilities and the repricing of the Term Loan are strategic moves by Utz to optimize its supply chain and improve its financial health. The reduction in manufacturing facilities from 16 to 8 since 2021 aligns with its strategy to leverage larger facilities better and reduce fixed costs. The transactions are expected to provide $14 million in after-tax net proceeds, which will be used to pay down long-term debt and add cash to the balance sheet, thereby reducing interest expense and potentially improving Utz's financial metrics. The successful repricing of the Term Loan is expected to save approximately $2 million annually in cash interest expense, further benefiting Utz's bottom line.
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