Cross-border buyers target undervalued US food companies

Family-owned food companies are stocking up on US snack companies, which are warming to the idea of private backers – many of them overseas – that can ​help them weather the storm in the supermarket aisles. Last week, Hanover, Pennsylvania-based potato chip maker Utz (UTZ.N) agreed to be taken private by Germany’s ‌Intersnack Group along with Utz’s founding families. The nearly $3 billion transaction marks the first US deal for Intersnack, a subsidiary of family-owned food conglomerate Pfeifer & Langen. That follows two deals by Italy’s family-owned Ferrero, which bought both cereal maker WK Kellogg and US protein snack brand Power Crunch. Also last year, Mars, the Virginia-based maker of M&M’s and Snickers, which is controlled by the Mars family, bought Pringles ​and Cheez-It maker Kellanova in a blockbuster $36 billion take-private deal. Families that have invested in the snack business for decades, some for more than a century, ​are snapping up public companies they see as undervalued following selloffs based on investors’ concerns about the growing popularity of weight-loss drugs, ⁠changing consumer tastes and stubbornly high inflation. “They want exposure to the US market, and believe there’s some public market value dislocation, which in turn is being used ​as a buying opportunity,” said Adam Taetle, Lazard’s global head of consumer and retail investment banking. Some food companies such as Campbell’s (CPB.O) and Lamb Weston (LW.N) fell out of the S&P ​500 this year because their market capitalizations shrunk too much to remain in the index. THE ELEPHANT IN THE SNACK AISLE For public snack companies that have become takeover targets, family-owned buyers are viewed as more patient long-term owners than private equity firms, which find it harder to justify such purchases, particularly because of limited ways to exit the investment later, sources said. “These types of buyers are ​able to think generationally, which is a very different approach,” said Taetle. Some private equity firms and public companies are also cautious of making a big play in the ​salty snacks category because of the competition it sets up against Frito-Lay owner PepsiCo , sources said. PepsiCo’s last food acquisition was a $1.2 billion deal for tortilla chip brand Siete Foods in 2025. For ‌public acquirers, ⁠it’s harder to defend a big snack acquisition if it falters. J.M. Smucker (SJM.N) bought Twinkies maker Hostess in 2023 for $5.6 billion. It has recorded $2.9 billion in impairment charges since then, and shares are down 18 per cent since the deal. “This is the fourth time in the past two years that a private company outside our radar has swooped in to acquire a public food company,” a TD Cowen report on the Utz deal said. “Quite possibly, this could help the market set a valuation floor for other ‘fallen stars’ in SMID-cap ​food and beverage.” The acquisition valued Utz at ​roughly 12 times core earnings, which ⁠excludes interest, taxes, depreciation and amortization. TD cited BellRing Brands (BRBR.N), which trades below eight times next year’s EBITDA, and Simply Good Foods (SMPL.O), which trades below six times that figure, as potential targets. PepsiCo trades at around 12 times EBITDA. MERGERS ACROSS BORDERS Many of the recent ​deals have a cross-border component, as these companies look to globalize their brands the way Kellanova did with Pringles before ​Mars bought it. The ⁠same thinking influenced Maryland-based spice maker McCormick’s (MKC.N) decision to buy Unilever’s food unit earlier this year. Intersnack, which makes Tyrells, Pom-Bear and Hula Hoops crisps, is little known in the US, but is seeking to become a leading global player in salty snacks and better compete with PepsiCo. The company, founded in 1968 in Germany, now operates in 31 countries. It generated $5 billion of ⁠sales in ​2025, which could grow to $6.6 billion when combined with Utz. Sources familiar with the deal expect Intersnack to ​look for more US acquisitions down the road. It declined to be interviewed for this story. “We see a tremendous opportunity to partner and build on Utz’s strong foundation and help shape the future of snacking ​in North America,” Intersnack’s executive chairman Johan van Winkel said in the deal announcement.