LONDON, UK / ACCESSWIRE / December 20, 2017 / Active-Investors issued a free report on The Hershey Co. (NYSE: HSY) ("Hershey"), which is readily accessible upon registration at www.active-investors.com/registration-sg/?symbol=HSY as the Company's latest news hit the wire. On December 18, 2017, the Company announced that it entered into a definitive agreement to acquire all the outstanding shares of Amplify Snack Brands (NYSE: BETR) ("Amplify") for $12.00 per share in cash and assume about $600 million in debt for the SkinnyPop popcorn and Tyrrell's potato chips maker. This announcement signals the intent of the new Chief Executive Officer (CEO), Michele Buck, to lead consolidation in the industry after the Company rejected a takeover bid from Oreo maker, Mondelez International, Inc. ("Mondelez"). Sign up now for our free research reports at:
www.active-investors.com/registration-sg
Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, The Hershey most recent news is on our radar and we have decided to include it on our blog post. Today's free coverage is available at:
www.active-investors.com/registration-sg/?symbol=HSY
Terms of the Agreement
The transaction is structured as a tender offer followed by a merger, valued at about $1.6 billion, including net debt and a make-whole payment of $76 million concerning the Tax Receivable Agreement. The transaction, according to the Companies, will be funded with cash on hand and new debt, and is expected not to impact Hershey's current earnings. The Company expects the transaction to be accretive to adjusted earnings per share in the first year post-closing, with an increase in accretion in the second year post the close.
Hershey stated that it expects to cut $20 million a year from Amplify's operating expenses, but no specifications were provided on how it would affect the Company's existing workforce. On October 26, 2017, in its Q3 FY17 release, Hershey stated that they were executing against the right strategies and investing in the brands and channels that would continue to drive its business forward.
Owing to the growth trajectory and margin structure of Amplify's key products, the acquisition is expected to be accretive to Hershey's financial milestones. Amplify's brands capitalize primarily on the fast-growing trends in the snacking industry, which Hershey's may find complementary to its portfolio. Also, the joint venture would bring forth a brand that invests in category management solutions to deliver a higher level of returns and velocity at the retail front.
Amplify's Recent Acquisition
Amplify bought Tyrrells from Investcorp, a Bahrain-based investment firm, in 2016. Tyrrells was founded by William Chase, a farmer, who later took up the reins to a crisps and vodka business as an entrepreneur. Hershey also recently rejected a takeover attempt by Cadbury and Oreo owner, Mondelez in 2016, where through this acquisition it plans to evolve into "an innovative snacking powerhouse."
Hershey's Q3 FY17 Results
Prior to the acquisition, Hershey announced its Q3 FY17 results for the three-month period ended October 01, 2017. The Company reported net sales of $2.033 billion for Q3 FY17, where net income stood at about $273.3 million, or $1.28 per share, versus $227.4 million, or $1.06 per share, in Q3 FY16.
During the reported quarter, the Company's Board of Directors also approved a new $100 million stock repurchase authorization, where according to the release, Hershey's solid balance sheet and strong cash flow generation delivered financial flexibility in returning cash to its shareholders.
Stock Performance Snapshot
December 19, 2017 - At Tuesday's closing bell, The Hershey's stock rose 1.04%, ending the trading session at $115.45.
Volume traded for the day: 1.16 million shares, which was above the 3-month average volume of 982.56 thousand shares.
Stock performance in the last month – up 5.82%; previous three-month period – up 6.48%; past twelve-month period – up 13.79%; and year-to-date - up 11.62%
After yesterday's close, The Hershey's market cap was at $24.48 billion.
Price to Earnings (P/E) ratio was at 34.38.
The stock has a dividend yield of 2.27%.
The stock is part of the Consumer Goods sector, categorized under the Confectioners industry.
Active-Investors:
Active-Investors (A-I) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and Canadian stocks. A-I has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles, and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.
A-I has not been compensated; directly or indirectly; for producing or publishing this document.
PRESS RELEASE PROCEDURES:
The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third-party research service company (the "Reviewer") represented by a credentialed financial analyst [for further information on analyst credentials, please email info@active-investors.com. Rohit Tuli, a CFA® charter-holder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by A-I. A-I is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.
NO WARRANTY
A-I, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. A-I, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, A-I, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.
NOT AN OFFERING
This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither A-I nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://active-investors.com/legal-disclaimer/.
CONTACT
For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:
Email: info@active-investors.com
Phone number: 73 29 92 6381
Office Address: 6, Jalan Kia Peng, Kuala Lumpur, 50450 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur, Malaysia
CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
SOURCE: Active-Investors
