The Hershey Company has agreed to acquire two makers of pretzels – Dot’s Pretzels, the owner of Dot’s Homestyle Pretzels (Dot’s), and Pretzels Inc. (Pretzels), a portfolio company of Peak Rock Capital, for a combined $1.2 billion in cash.
Dot’s was founded in 2011 by Dorothy Henke in her home kitchen in Velva, North Dakota with spices purchased at a local Sam’s Club. The company’s products are available in a range of flavors including original, Southwest, and Honey Mustard and are produced at four facilities in North Dakota, Kansas (2) and Arizona. In 2020, Dot’s held a 9 % market share in the $2 billion pretzel category and is the fastest growing pretzel brand in the United States.
“I am proud of the progress that we’ve made as a team and am confident Hershey’s will help take a great brand we built here in North Dakota and get Dot’s Pretzels into even more people’s hands – and hearts!” said Ms. Henke.
Pretzels, acquired by Peak Rock in October 2018, is a contract and branded manufacturer of traditional, peanut-butter-filled, flavored, seasonal, and gluten-free pretzels, as well as other extruded snack products including puffed cheese curls, cheese balls and corn puffs. Pretzels’ contract manufacturing customers include Dot’s among many other customers.
Pretzels, led by CEO Greg Pearson, was founded in 1978 and is based south of Ft. Wayne in Bluffton, Indiana with additional facilities near South Bend in Plymouth, Indiana (opened in 2017) and in Lawrence, Kansas (opened in 2021).
For the 12 months ending in September 2021, Dot’s had revenues of $160 million (up by 35% from the prior year) and an adjusted EBITDA of $59 million (a 37% margin). When combined, Dot’s and Pretzels will have total annual revenues of approximately $275 million. To review a PDF of Hershey’s review of the Dot’s and the Pretzels acquisitions, click HERE.
Hershey is buying Dot’s and Pretzels, its Midwest co-manufacturer, to broaden its salty-snack portfolio which also includes the brands SkinnyPop and Pirate’s Booty.
“As the fastest growing United States pretzel brand, Dot’s Pretzels would further accelerate our success in the salty snack category, along with our successful SkinnyPop and Pirate’s Booty brands,” said Michele Buck, Hershey’s president and chief executive officer. “With a unique range of bold, distinctive seasonings and a flavorful crunch that creates a premium pretzel experience for consumers, Dot’s Pretzels stand apart from all other products in the pretzel category and represents 55 percent of the pretzel category’s growth during the past year.”
“Pretzels Inc. will help us expand Hershey’s snacking and production capabilities while keeping the special connection to Dot’s,” added Mr. Buck. “It will be important as we continue to grow this already fast-growing brand and create new products in the broader pretzel category.”
The Hershey Company is one of the largest chocolate manufacturers in the world. The company’s products are sold under more than 90 brand names including Hershey’s, Reese’s, Kit Kat, Jolly Rancher, Ice Breakers, SkinnyPop, and Pirate’s Booty.
Hershey was founded by Milton Hershey in 1894 and today the Hershey Trust owns a minority stake in the business but retains a majority of the voting power. Hershey has annual revenues of $8.1 billion, more than 17,000 employees, and is headquartered in Hershey, Pennsylvania.
The acquisitions of Dot’s and Pretzels are expected to close by the end of 2021.
© 2021 Private Equity Professional | November 16, 2021
Dominus Capital has agreed to sell Cincinnati Fan & Ventilator to publicly traded SPX Corporation.
“Cincinnati Fan has become a leading player in the air movement space,” said Bob Haswell, a founding partner of Dominus. “Dominus was able to bring significant resources to professionalize the business and grow both organically and through acquisition. We completed two acquisitions, expanded capacity, and invested in new product development under our ownership. Paul, management, and the company are very well positioned to drive growth for SPX and its investors.”
“Cincinnati Fan’s well-known brand and attractive niche-engineered products are a strong fit with our global HVAC cooling business, where we already share some common distribution in the US,” said Mr. Lowe. “We see multiple opportunities to create additional value, and accelerate our combined growth, by leveraging Cincinnati Fan’s technical expertise in engineered air movement across our US and global cooling platforms.”
Founded in 2008, New York-based 
Midland Industries, a portfolio company of Wynnchurch Capital since January 2018, has acquired Century Brass Products.
Lightyear Capital has held a final close of its fifth private equity fund, Lightyear Fund V LP and Lightyear Fund V-A LP (together, Fund V), with $1.6 billion in total capital.
“We are very pleased with this outcome and want to thank not only our existing investors for their continued strong support but also all our new investors who are entrusting Lightyear with their assets,” said Mark Vassallo, the managing partner of Lightyear. “Our talented team, investment culture and process, and successful track record made this achievement possible. Thank you as well to our management teams for their leadership and partnership in building strong companies.”