The Hershey Company announced Nov. 10 that it has reached an agreement to acquire Dot's Pretzels LLC and its co-manufacturer, Pretzels Inc., for a combined purchase price of $1.2 billion. It's Hershey's second-largest acquisition in company history, and provides considerably accelerates its growth beyond confectionery products.
Hershey touts Dot's Pretzels, the owner of Dot's Homestyle Pretzels, as the fastest-growing scale brand in the pretzel category.
"As the fastest-growing U.S. pretzel brand, Dot's Pretzels would further accelerate our success in the permissible salty snack category, along with our successful SkinnyPop and Pirate's Booty brands," said Michele Buck, The Hershey Company president and CEO. "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."
Dot's has four pretzel-seasoning facilities across North Dakota, Arizona and Kansas.
Along with Dot's, Hershey will gain Pretzels Inc. from an affiliate of private investment firm Peak Rock Capital. Based in Bluffton, IN, Pretzels Inc. is a co-manufacturer of pretzels for Dot's and several other customers. It operates three production locations in Indiana and Kansas.
"The acquisition of Pretzels Inc. would give Hershey deep pretzel category and product expertise and the manufacturing capabilities to support Dot's growth and future pretzel innovation as well as the continued growth in the entire pretzel category through Pretzels Inc.'s leading co-manufacturing capabilities," Hershey said Nov. 10.
Hershey said Dot's and Pretzels Inc.'s aggregate net sales are a combined $275 million for the 12 months ended September 2021. The transactions are expected to close by the end of this year.
"Pretzels Inc. will help us expand Hershey's snacking and production capabilities while keeping the special connection to Dot's," Buck added. "It will be important as we continue to grow this already fast-growing brand and create new products in the broader pretzel category."