Conagra to divest DSD snacks business to Utz Quality Foods

US-based packaged foods company Conagra Brands (CAG) has signed an agreement to sell its Direct Store Delivery (DSD) snacks business to Utz Quality Foods.

Utz Quality Foods will acquire various Conagra brands, including Tim’s Cascade Snacks, Hawaiian Snacks, Erin’s, Snyder of Berlin and Husman’s.

Conagra Brands president and CEO Sean Connolly said: “We continue to reshape our portfolio and focus our resources on priorities that support Conagra’s business strategy and create value for shareholders.

“While Conagra has a large and growing snacks business, we do not currently operate with a DSD model. We believe this business will have more opportunity for growth under Utz, an established DSD operator.”

Last October, DSD snacks business was acquired by Conagra as part of the company’s acquisition of Pinnacle Foods in a deal worth $10.9bn.

Established in 1921, Utz Quality Foods is engaged in the production of salty snacks, including potato chips, pretzels, cheese snacks, corn chips, tortillas, veggie stix/straws, popcorn, onion rings and pork skins.

Utz Quality Foods CEO Dylan Lissette said: “We are excited about the opportunity to add these important brands and capabilities to our portfolio.

“Their distribution and manufacturing capabilities, along with their customer relationships, enhance our ability to further grow our brand portfolio further west.”

Subject to customary closing conditions, the deal is expected to close by the end of the calendar year.

Financial details of the deal have not been disclosed by both the companies.

In May, Conagra Brands completed the sale of its frozen pasta business Gelit to an Italian investment company.

The investment company is owned by a consortium of financiers, including Consilum SGR, Progressio SGR and MMM, whose reference shareholder is Massimo Menna.