-=Amplify Snack Brands (BETR) to be acquired by Hershey (HSY) for $12.00/share

Amplify Snack Brands confirms agreement to be acquired by Hershey (HSY) for $12.00/share in cash 

Under the terms of the agreement between Hershey and Amplify, Hershey has agreed to acquire all of the outstanding shares of Amplify Snack Brands, Inc. for $12.00 per share, in a transaction structured as a tender offer followed by a merger, valued at approximately $1.6 billion, including net debt and including a make-whole payment of $76 million related to the Tax Receivable Agreement). Based on previously announced guidance, this represents a multiple of approximately 14.8-times 2017 Adjusted EBITDA including identified annual run-rate synergies of approximately $20 million expected to be generated over the next two years from cost savings and portfolio optimization.

• The transaction will be funded with cash on hand and new debt and is not expected to impact Hershey's current ratings.
• Hershey expects the transaction to be accretive to adjusted earnings per share-diluted, including transaction related non-cash amortization, in the first-year post closing with accretion increasing in year two. Adjusted earnings per share-diluted accretion in both years is substantially higher when excluding transaction related amortization. The acquisition is not expected to affect the previously announced full year 2017 outlooks provided in Hershey's and Amplify's third quarter earnings release and conference calls.

-=Hershey Foods (HSY) reported earnings on Thur 26 Oct 2017 (b/o)

Hershey Foods beats by $0.04, beats on revs; reaffirms FY17 EPS at high-end of range, updates other metrics; announces $100 mln repurchase

• Reports Q3 (Sep) earnings of $1.33 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus of $1.29; revenues rose 1.5% year/year to $2.03 bln vs the $2.01 bln Capital IQ Consensus.
• Adjusted gross margin was 45.3% in the third quarter of 2017, compared to 45.6% in the third quarter of 2016. Supply chain productivity and cost savings initiatives, as well as lower input costs, were more than offset by higher freight rates and increased manufacturing and distribution costs associated with an effort to maintain customer service targets, as well as unfavorable sales mix.
• Co reaffirms guidance for FY17, sees EPS at high-end of $4.72-4.81, excluding non-recurring items, vs. $4.82 Capital IQ Consensus Estimate.
  • The company continues to execute against the priorities outlined earlier in the year. Our seasonal business and programs are on track and the fourth quarter launch of Hershey's Gold, a caramelized crme with peanuts and pretzels, should enable us to deliver on our objectives. The company is committed to its business model of investing in its brands and go-to-market capabilities that should strengthen Hershey's leadership position and build upon marketplace results. The company reaffirms its full-year constant currency net sales growth of around 1.25% and expects foreign currency exchange rates to be about neutral, versus a prior estimate of 0.25 points unfavorable.
  • For the full year, we expect adjusted gross margin to increase about 25 basis points versus our previous outlook of about a 50 basis point increase. Productivity and cost savings initiatives, as well as lower input costs, are expected to be partially offset by the aforementioned higher freight, new packaging and customer service costs. Our brands typically respond positively to marketplace investments and there is no change to our full-year North America advertising and related consumer marketing outlook. International and Other segment advertising and related consumer marketing expense is estimated to be lower in 2017 versus 2016, resulting in total company spend that should be about the same as last year. In 2017, the company continues to anticipate its effective tax rate to be in the 26.5% to 27.0% range. As discussed earlier this year, the reduction in the 2017 tax rate versus 2016 is primarily driven by favorable foreign rate differential and investment tax credits, as well as the adoption of Accounting Standards update 2016-09 for the accounting of employee share-based payments. As a result, the company continues to expect the full year increase in adjusted earnings per share-diluted to be around the high end of its outlook of $4.72 to $4.81, or a 7% to 9% increase versus last year.
• The Hershey Company's board of directors approved a new $100 million stock repurchase authorization. Hershey's solid balance sheet and strong cash flow generation gives the company continued flexibility against its cash priorities, including, returning cash to shareholders in the form of buy backs and dividends while also being able to participate in opportunistic merger and acquisition activity.

=Hershey Foods (HSY) reported earnings on Fri 28 Oct 2016 (b/o)

Hershey Foods beats by $0.11, reports revs in-line; guides FY16 EPS above consensus, revs in-line :

• Reports Q3 (Sep) earnings of $1.29 per share, $0.11 better than the Capital IQ Consensus of $1.18; revenues rose 2.2% year/year to $2 bln vs the $1.99 bln Capital IQ Consensus. Unfavorable foreign currency exchange rates a 0.2 point headwind.
• Co issues guidance for FY16, sees EPS of $4.28-4.32 including acq dilution from $4.24-4.28 vs. $4.26 Capital IQ Consensus Estimate; sees FY16 revs of +1% to ~$7.459 bln vs. $7.45 bln Capital IQ Consensus Estimate.
• "Throughout 2016, our top priority has been to restore consistency across the business. Against a backdrop of continued snacks competition, we experienced improvements in key aspects of our business. Our brands responded positively to the marketplace investments we discussed last quarter, which is why we continue to believe that candy, mint and gum is an attractive category capable of solid growth over the long term when supported with the right mix of customer and consumer marketing."

Hershey (HSY) receives a takeover bid from Mondelez (MDLZ)

Update 8/29/16: Mondelez ends effort to acquire Hershey Co.

    

Mondelez International is attempting to buy chocolate company Hershey, move its global chocolate headquarters to Pennsylvania and rename the company Hershey, the Wall Street Journal reports, citing people familiar with the deal.

Deerfield, Illinois-based Mondelez, the global snacks company that makes Oreo cookies and Ritz Crackers, recently sent a letter to Hershey proposing the combination, the Journal writes. As part of the proposal, Mondelez is pledging to protect jobs following any merger and move its chocolate headquarters to Hershey's home in Hershey, Pa.  Hershey's market capitalization increased to $24.5 billion after the stock's jump. Mondelez's stock surged 2.1%, taking its market cap up to $68.1 billion.

• Merged company to be called Hershey
• HQ in Pennsylvania
• No job cuts in Pennsylvania
• Kit Kat license would go back to Nestlé
• Contingent on approval from the Hershey Trust
• Hershey said on Thursday it had rejected the $23 billion preliminary offer by Mondelez

 

Holding the key to the sale of America's second-biggest candy company is a scandal-scarred, $12 billion charity that all but owns Hershey, Pennsylvania.

Hershey Trust Co. controls about 80 percent of Hershey Co., guides the 107-year-old Milton Hershey School, and oversees an amusement park and resort in the town of about 14,000.

Its 10 trustees have been averse to deals, scuttling efforts to separate them from their candy-coated source of cash.

-=Hershey Foods (HSY) reported Q1 earnings on Tue 26 Apr 2016 (b/o)

Hershey Foods beats by $0.03, misses on revs; guides FY16 EPS below consensus  :

• Reports Q1 (Mar) earnings of $1.10 per share, $0.03 better than the Capital IQ Consensus of $1.07; revenues fell 5.6% year/year to $1.83 bln vs the $1.9 bln Capital IQ Consensus. As expected, first-quarter net sales declined 5.6%; unfavorable foreign currency exchange rate a 1.2 point headwind, resulting in a constant currency net sales decline of 4.4%.
• Co issues downside guidance for FY16, sees EPS of $4.24-4.28 vs. $4.34 Capital IQ Consensus Estimate. Constant currency net sales growth expected to be around 2.5%, including a net benefit from acquisitions, primarily barkTHINS, of about 0.5 points; unfavorable foreign currency exchange rates estimated to be a 1.0 point headwind. This is less than the previous estimate of about 3.0%, primarily due to lower than expected non-seasonal CMG growth over the remainder of the year.

=Hershey Foods (HSY) reported 4Q earnings on Thur 28 Jan 2016 (before open)

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Hershey Foods beats by $0.03, misses on revs; guides FY16 EPS in-line, revs in-line; adds $500 mln to repurchase :

• Reports Q4 (Dec) earnings of $1.08 per share, $0.03 better than the Capital IQ Consensus of $1.05; revenues fell 5.0% year/year to $1.91 bln vs the $1.97 bln Capital IQ Consensus.
• Co issues in-line guidance for FY16, sees EPS of $4.36-4.38 vs. $4.38 Capital IQ Consensus Estimate; sees FY16 revs of ~$7.53 bln (+2%) vs. $7.56 bln (+2.4%) Capital IQ Consensus Estimate. Excluding unfavorable foreign currency exchange rates, full-year constant currency net sales growth is expected to be around 3.0%.
• "Over the long term we expect constant currency net sales growth of 3% to 5%"
• The co announced that its Board of Directors has approved an additional $500 million stock repurchase authorization to repurchase shares of its Common Stock.