Utz Brands, Inc. (NYSE:UTZ) entered into a definitive agreement to acquire R.W. Garcia Co. Inc. from Garcia family for approximately $57.8 million on November 2, 2021. Under the agreement, certain subsidiaries of Utz Brands will acquire the equity and certain real estate assets related to the operation of RW Garcia for a total purchase price of $56 million which is subject to customary purchase price adjustments.

As of October 3, 2021, the Company had $26.0 million of cash on hand and $133 million available under its revolving credit facility, providing liquidity in excess of $159 million. The company expects to use balance sheet cash and its revolving credit facility to fund the acquisition. The transaction represents an acquisition multiple of approximately 9.6x RW Garcia Adjusted EBITDA of $5.8 million excluding synergies, and an acquisition multiple of 5.7x including expected run-rate cost synergies of approximately $4.0 million.

For the fiscal year ended June 30, 2021, RW Garcia generated net sales and Adjusted EBITDA of approximately $66.2 million and $5.8 million, respectively. The transaction is subject to customary closing conditions and is expected to close in the fourth quarter of 2021. Utz expects the transaction to be accretive to earnings in fiscal 2022 and beyond.

Houlihan Lokey, Inc. (NYSE:HLI) acted as financial advisor to Utz Brands, Inc.