Utz Quality Foods to Combine with Collier Creek Holdings to Form Utz Brands, Inc.

Utz Quality Foods, LLC ('Utz' or the 'Company'), a leading U.S. manufacturer of branded salty snacks, and Collier Creek Holdings ('Collier Creek') (NYSE: CCH, CCH.U, CCH WS), a special purpose acquisition company, today announced that they have entered into a definitive agreement (the 'Business Combination Agreement') to combine and form Utz Brands, Inc. ('Utz Brands').

Utz Brands will be a leading pure-play snack food platform in the U.S. Upon the closing of the transaction, it is expected that Utz Brands will trade under the ticker symbol 'UTZ' on the New York Stock Exchange.
 

The Company's iconic portfolio of authentic, craft and better-for-you brands includes Utz, Zapp's, Golden Flake, Good Health, and Boulder Canyon, among others.

The Company operates 14 manufacturing facilities nationwide with a broad range of capabilities, producing a full line of potato chips, pretzels, cheese snacks, veggie snacks, pork skins, pub/party mix, and other snacks, including innovative better-for-you snacking options.

After nearly a century as a family-owned business, this transaction will introduce Utz as a publicly listed company, with an anticipated initial enterprise value of approximately USD 1.56 billion or 11.6x its estimated 2021 Pro Forma Adjusted EBITDA of USD 134 million.

Collier Creek was co-founded by Chinh Chu, Roger Deromedi, and Jason Giordano, who bring more than 80 years of combined investing and operating experience, with a focus on the consumer goods sector. Mr. Deromedi, who had a long and successful tenure as Chairman of Pinnacle Foods and, prior to that, as CEO of Kraft Foods, will become Chairman of Utz Brands.

Utz Brands' board of directors will be composed of a majority of independent directors under the applicable listing rules of the New York Stock Exchange.

Dylan Lissette, who has served as Utz's CEO since 2013 and has worked at the Company for almost 25 years, will continue to lead the business along with the existing management team. Utz Brands will remain headquartered in Hanover, Pennsylvania.

Proceeds from the transaction are expected to be used primarily to repay existing borrowings at Utz. The Rice and Lissette family, the founding family and owners of Utz, will retain more than 90% of its existing equity stake, which will represent more than 50% ownership in Utz Brands upon completion of the transaction.

Dylan Lissette, who has served as Utz's CEO:
 

“As we approach our 100-year anniversary, we are excited to take this important step forward to position Utz for its next century of growth.”

“This transaction enables Utz to continue its long-term growth plans and provides greater access to capital to fund organic and inorganic growth. We remain deeply committed to Utz's continued success.”

“We look forward to partnering with Roger and the seasoned team at Collier Creek as we leverage their experience in driving value creation in food platform companies.”

“As a public company, I am confident that Utz will continue to grow its importance within the salty snack industry, bringing more of our brands to an ever-greater consumer audience across the U.S.”

Roger Deromedi, Collier Creek co-founder:
 

“Utz Brands is a phenomenal business combination that meets all of the criteria we established when we launched Collier Creek.”

“It's a leading platform in the attractive and growing salty snack category, with significant competitive advantages and multiple opportunities to accelerate growth and drive value creation.”

“We are confident that by supporting Dylan and the talented management team with our proven operating playbook, Utz can become the fastest-growing pure-play branded snack platform of scale in the U.S. We look forward to working with the Utz team in the years ahead.”

Chinh Chu, Collier Creek co-founder:
 

“Our partnership with Utz is consistent with our philosophy of investing in high-quality, durable businesses with compelling growth opportunities.”

“This transaction delivers significant near-term value to our existing shareholders, and we are fully aligned with the Rice and Lissette family to drive long-term value creation in the future.”

Jason Giordano, Collier Creek co-founder:
 

“We look forward to working closely with Utz's management to unlock meaningful value for all stakeholders by investing in innovation and marketing to delight consumers, expanding distribution into new retailers and geographies, broadening the Utz product offering, driving operational efficiencies, and capitalizing on strategic acquisition opportunities that further enhance Utz's unique platform and brand portfolio.”

Key Transaction Terms

The transaction has been unanimously approved by the board of directors of Collier Creek, as well as the board of managers of Utz. The transaction is expected to close in the third quarter of 2020, subject to the satisfaction of customary closing conditions, including the approval of the shareholders of Collier Creek. Upon the closing of the transaction, Collier Creek will become a Delaware corporation and the name of Collier Creek will be changed to Utz Brands, Inc.

The Rice and Lissette family is retaining more than 90% of its existing equity stake, which will represent more than 50% ownership in Utz Brands upon closing of the transaction. The remaining ownership will be held by the public shareholders and sponsor of Collier Creek.

In connection with the transaction, Collier Creek's sponsor and directors will invest approximately USD 35 million alongside public investors via a private placement pursuant to the forward purchase agreements entered into concurrent with Collier Creek's initial public offering.

Assuming no redemptions by the public shareholders of Collier Creek, the approximately USD 453 million in cash held in Collier Creek's trust account, together with the USD 35 million private placement, will be used to pay cash consideration to the current Utz owners, pay transaction expenses, and reduce the Company's existing indebtedness to approximately 3.1x estimated 2020 Pro Forma Adjusted EBITDA.

The transaction will be structured as an Up-C where the continuing Utz owners will retain common units of a partnership managed by Utz Brands and an equal number of non-economic voting shares in Utz Brands.

Utz Brands will also enter into a customary tax receivable arrangement with continuing Utz owners, which will provide for the sharing of tax benefits relating to certain pre-combination tax attributes, as well as tax attributes generated by the transaction and any subsequent sales or exchanges by the continuing Utz owners of their equity interests, as those attributes are realized by Utz Brands.

A more detailed description of the transaction terms will be included in a current report on Form 8-K to be filed by Collier Creek with the U.S. Securities and Exchange Commission ('SEC').

Goldman Sachs and Sageworth are acting as financial advisors to Utz. Citigroup, Credit Suisse, and BofA Securities are acting as capital markets advisors to Collier Creek. Citigroup and Credit Suisse are acting as lead financial advisors with BofA Securities and Nomura also serving as financial advisors to Collier Creek. Cozen O'Connor is acting as legal counsel to Utz and Kirkland & Ellis LLP is acting as legal counsel to Collier Creek.

Conference Call Information

Collier Creek's investor conference call and presentation discussing the transaction can be accessed by visiting www.netroadshow.com and entering the passcode Utz2020. A transcript of the call will also be filed by Collier Creek with the SEC.