PENDING MERGER |
9 Months Ended |
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Sep. 27, 2026 | |
| Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] | |
| ACQUISITIONS | PENDING MERGER On July 20, 2026, UBI entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Idaho USA, Inc., a Delaware corporation (“Acquiror”), Idaho Merger Sub, Inc., a Delaware corporation and direct or indirect wholly-owned subsidiary of Acquiror (“Merger Sub”), and Intersnack Group GmbH & Co. KG, a German limited partnership (“Intersnack Group”). The Merger Agreement provides that, on the terms and subject to the conditions of the Merger Agreement, Merger Sub will merge with and into UBI (the “Merger”), and following the Merger, UBI will continue as the surviving corporation in the Merger and become an indirect wholly-owned subsidiary of Intersnack Group (the “Surviving Corporation”). At the effective time of the Merger (the “Effective Time”), each share of Class A Common Stock issued and outstanding immediately prior to the Effective Time (other than any (i) shares owned or held in treasury by the Company, which will be automatically cancelled for no consideration, (ii) shares owned by any direct or indirect subsidiary of the Company or by Intersnack Group or any of its direct or indirect subsidiaries, which will remain outstanding at the Effective Time and (iii) shares as to which appraisal rights have been properly exercised and perfected under Section 262 of the Delaware General Corporation Law) will be automatically converted into the right to receive $14.25 per share of Class A Common Stock in cash, without interest and net of applicable withholding taxes (the “Merger Consideration”). In addition, at the Effective Time, each share of Class V Common Stock issued and outstanding immediately prior to the Effective Time (all of which are held by Series U of UM Partners, LLC (“Series U”) and Series R of UM Partners, LLC (together with Series U, the “Continuing Stockholders”), which are the Noncontrolling Interest Holders (as defined in Note 14. Income Taxes), will be automatically canceled for no consideration. Implementation Agreement and Recapitalization Concurrently with the execution of the Merger Agreement, each of the Continuing Stockholders, Intersnack Group, Acquiror, UBI and Utz Brands Holdings, LLC, an affiliate of the Company (“UBH”), entered into an implementation agreement (the “Implementation Agreement”), under which the parties thereto agreed to complete, substantially concurrently with the closing of the Merger (the “Closing”), the following transactions in the following sequence: (i) the parties to the Merger Agreement consummating the Merger in accordance with the terms and conditions of the Merger Agreement; (ii) the Surviving Corporation making a payment (the “TRA Payment”) of $44.0 million, in the aggregate, to the Continuing Stockholders in connection with the termination of the Tax Receivable Agreement (as amended, the “Tax Receivable Agreement” or “TRA”); (iii) the effectiveness of certain provisions of the Fourth Amended and Restated Limited Liability Company Agreement of UBH (the “Fourth A&R LLC Agreement”); (iv) the Continuing Stockholders’ purchase of 2,315,790 common units of UBH (“Common Units”) from the Surviving Corporation at a per-Common Unit price of $14.25 (the “Purchase”); and (v) UBH’s redemption from the Surviving Corporation of a number of Common Units in exchange for an aggregate amount of cash and, if required, a promissory note issued by UBH to the Surviving Corporation (the “Redemption Promissory Note”), calculated using the same per-Common Unit price used to calculate the number of Common Units to be sold in the Purchase, such that, immediately following the Closing, the Purchase and the Redemption (as defined below), the Surviving Corporation, on the one hand, and the Continuing Stockholders, in the aggregate, on the other hand, will each own 50% of the issued and outstanding Common Units of UBH (the “Redemption” and, together with the Purchase, the “Recapitalization”). The principal amount of the Redemption Promissory Note, if any, may not exceed the sum of $100.0 million and the Equipment Financing Repayment Amount (as defined in the Redemption Agreement) (the “Redemption Note Cap”). Concurrently with the execution of the Merger Agreement, UBI entered into the following additional agreements: (i) a voting agreement (the “Voting Agreement”) with the Continuing Stockholders, Dylan B. Lissette, Timothy P. Brown and the Rice Family Foundation (collectively, the “Voting Agreement Stockholders”), Intersnack Group and Acquiror, pursuant to which the Voting Agreement Stockholders agreed, among other things, to vote all of the shares of Class A Common Stock and Class V Common Stock owned (beneficially and of record) by them in favor of the approval and adoption of the Merger Agreement and the other Transaction Agreements and the transactions contemplated thereby, including the Merger, the TRA Payment and the Recapitalization; (ii) Amendment No. 2 to the TRA (the “TRA Amendment”) with UBH, the Continuing Stockholders and the TRA Party Representative (as defined therein), pursuant to which the TRA will automatically terminate effective as of and concurrently with the Closing, and in connection with such termination, the Continuing Stockholders will be paid, in the aggregate, the TRA Payment; (iii) Amendment No. 1 to the Third Amended and Restated Limited Liability Company Agreement of UBH, with UBH and the Continuing Stockholders, which took effect upon execution and includes, among other things, restrictions on the Continuing Stockholders’ ability to, prior to the Closing, transfer or exchange their Common Units and change or terminate UBI as the managing member of UBH; (iv) the Fourth A&R LLC Agreement, certain provisions (the “Closing Provisions”) of which will become automatically effective substantially concurrently with the Closing and immediately following the TRA Payment, which provisions will automatically amend and restate in its entirety the existing limited liability company agreement, as amended, of UBH and include, among other matters, governance provisions for the post-closing operations of UBH, including relating to board composition, member approval rights, transfer restrictions, drag-along rights and certain exit rights for the Continuing Stockholders through a put/call structure; (v) a purchase agreement with the Continuing Stockholders (the “Purchase Agreement”) to effect the Purchase; and (vi) a redemption agreement with UBH (the “Redemption Agreement”) to effect the Redemption. The Merger Agreement, the Implementation Agreement and the agreements described in clauses (i) through (vi) above are referred to collectively as the “Transaction Agreements,” and the transactions contemplated by the Transaction Agreements, including the Merger, the TRA Payment and the Recapitalization, are referred to collectively as the “Transactions.” Closing Conditions Each party’s obligation to consummate the Merger is conditioned upon (i) the affirmative vote of (x) the holders of a majority of the issued and outstanding shares of Class A Common Stock and Class V Common Stock and (y) a majority of the votes cast by the Company’s disinterested stockholders (as such term is defined in Section 144 of the Delaware General Corporation Law), in each case in favor of the approval and adoption of the Merger Agreement, the other Transaction Agreements and the Transactions (together, the “Company Stockholder Approval”); (ii) no order by any court of competent jurisdiction, any federal, state or comparable foreign Governmental Entity (as defined in the Merger Agreement) of competent jurisdiction or any other material Governmental Entity of competent jurisdiction in the United States or in any jurisdiction where Intersnack Group or UBI has material sales or operations having been entered and continuing to be in effect that temporarily or permanently prohibits, enjoins or makes illegal the consummation of the Merger, the TRA Payment, the termination of the TRA, the Recapitalization or the effectiveness of the Closing Provisions of the Fourth A&R LLC Agreement (any of the foregoing, a “Legal Restraint”); and (iii) the expiration or termination of the required waiting period applicable to the Merger or the Recapitalization under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and receipt of other clearances or approvals under applicable antitrust laws in identified jurisdictions. In addition, the obligation of each party to consummate the Merger is conditioned upon the other party’s representations and warranties being true and correct (subject to certain customary materiality exceptions and qualifications) and the other party having performed in all material respects its obligations under the Merger Agreement and the other Transaction Agreements and, in the case of Intersnack Group, Acquiror and Merger Sub, no Burdensome Condition (as defined in the Merger Agreement) being a condition to receipt of (or otherwise included in) any required regulatory approval and no Company Material Adverse Effect having arisen or occurred following the date of the Merger Agreement that is continuing. In addition, the obligation of Intersnack Group, Acquiror and Merger Sub to consummate the Merger is conditioned, among other things, on (i) the TRA Payment, the termination of the TRA and the Recapitalization being consummated substantially concurrently with the Closing and the Closing Provisions of the Fourth A&R Company LLC Operating Agreement becoming effective substantially concurrently with the Closing (provided that (A) except in the case of clause (B), this condition will not apply if the reason that it is not satisfied is because Intersnack Group has not complied with certain specified obligations in the Implementation Agreement and the Merger Agreement and all other conditions to the consummation of the Merger are satisfied or waived or would be satisfied if the Closing were to occur) and (B) this condition will not be satisfied if the amount of a required Redemption Promissory Note would exceed at the Closing the Redemption Note Cap at such time); (ii) certain representations and warranties of the Continuing Stockholders being true and correct as set forth in the Implementation Agreement (subject to certain qualifications); and (iii) a certificate being delivered by each Continuing Stockholder under the Implementation Agreement certifying that the condition in clause (ii) of this sentence has been satisfied. The waiting period under the HSR Act expired on September 9, 2026, and clearance under the Law on the Protection of Economic Competition of 2001 (as amended) of Ukraine was obtained on September 17, 2026. Receipt of debt financing by Intersnack Group is not a condition to the Closing or to the consummation of any of the Transactions. Covenants, Termination and Termination Fee The Merger Agreement contains customary representations, warranties and covenants of UBI, Intersnack Group, Acquiror and Merger Sub. From the date of the Merger Agreement until the earlier of the termination of the Merger Agreement in accordance with its terms and the Effective Time, among other things, subject to specified exceptions, UBI is required to use commercially reasonable efforts to conduct the business in all material respects in the ordinary course of business and not to take certain actions prior to the Closing without the prior written consent of Acquiror (which consent will not be unreasonably withheld, conditioned or delayed, subject to specified exceptions). Under the Merger Agreement, subject to certain limitations, UBI is permitted to declare and pay quarterly cash dividends on its common stock at times consistent with past practice, in an amount per quarter not exceeding $0.063 per share, and to declare and pay special dividends to holders of Class A Common Stock following certain tax distributions from UBH, in the ordinary course of business at times consistent with past practice, in an amount not to exceed $0.01 per share per year. Either UBI or Acquiror may terminate the Merger Agreement by mutual written consent or if, subject to certain limitations, (i) the Effective Time has not occurred on or prior to April 20, 2027 (the “Outside Date”), (ii) any Legal Restraint permanently prohibiting the Merger has become final and non-appealable, (iii) the Company Stockholder Approval has not been obtained at the special meeting of stockholders held for the purpose of obtaining the Company Stockholder Approval or any adjournment or postponement thereof or (iv) the other party breaches its representations, warranties or covenants in the Merger Agreement in a manner that would result in applicable closing conditions not being satisfied, subject to certain cure periods. UBI also has the right, prior to receipt of the Company Stockholder Approval, to terminate the Merger Agreement, subject to certain limitations, in order to substantially concurrently enter into a definitive agreement with respect to a superior proposal (so long as UBI pays the Termination Fee (as defined below) to Acquiror). Acquiror also has the right to terminate the Merger Agreement at any time, prior to receipt of the Company Stockholder Approval, following a change of recommendation by the Board (acting on the recommendation of the special committee of the Board) or the special committee of the Board or a willful and material breach by UBI of the no solicitation provisions in the Merger Agreement. UBI will be required to pay Acquiror a termination fee equal to $50.0 million (the “Termination Fee”) under specified circumstances, including if (i) Acquiror terminates the Merger Agreement prior to the receipt of the Company Stockholder Approval following a change of recommendation by the Board (acting on the recommendation of the special committee of the Board) or the special committee of the Board or a willful and material breach by UBI of the no solicitation provisions in the Merger Agreement, (ii) the Company terminates the Merger Agreement prior to the receipt of the Company Stockholder Approval in order to substantially concurrently enter into a definitive agreement with respect to a superior proposal or (iii) the Merger Agreement is terminated under certain circumstances and, within one year of such termination, UBI enters into a definitive agreement to effect, or consummates, a Company Takeover Transaction (as defined in the Merger Agreement). Treatment of Equity Awards At the Effective Time, (i) each stock option that is outstanding and unexercised will be deemed to be fully vested and will be canceled and converted into the right to receive an amount, in cash, without interest, equal to the product of (A) the total number of shares of Class A Common Stock subject to such stock option and (B) the excess, if any, of the Merger Consideration over the exercise price per share of such stock option, and any stock option with a per share exercise price equal to or greater than the Merger Consideration will be cancelled without any payment therefor; (ii) each restricted stock unit (“RSU”) and performance stock unit (“PSU”) held by a director of the Company who is not an employee of the Company (each, a “Director RSU”) will be deemed to be fully vested and will be canceled and converted into the right to receive an amount, in cash, without interest, equal to the sum of (x) the product of (A) the total number of shares of Class A Common Stock subject to such Director RSU and (B) the Merger Consideration and (y) all cash dividend equivalents accrued or credited with respect to such Director RSU; and (iii) each RSU and PSU other than a Director RSU will be converted into the contingent right to receive an amount, in cash, without interest, equal to the sum of (x) the product of (A) the number of shares of Class A Common Stock subject to such award and (B) the Merger Consideration and (y) all cash dividend equivalents accrued or credited with respect to such award (each, a “Restricted Cash Award”), with the number of shares of Class A Common Stock subject to each PSU determined based on the actual level of performance as of immediately prior to the Effective Time. Each Restricted Cash Award will continue to have, and will be subject to, the same terms and conditions (excluding any performance conditions and additional dividend equivalent rights), including vesting terms and conditions, as applied to the corresponding RSU or PSU immediately prior to the Effective Time and will be payable in cash within thirty days following the vesting thereof. In addition, the Company will terminate the Utz 2021 Employee Stock Purchase Plan effective as of immediately prior to the Effective Time. The Merger Agreement did not modify the terms of UBI's outstanding share-based awards prior to the Effective Time and, accordingly, did not affect the share-based compensation expense recognized during the thirteen and thirty-nine weeks ended September 27, 2026. The Company will account for the effects of the Merger on its outstanding share-based awards at the Effective Time. Other Accounting Considerations The consolidated financial statements as of and for the thirteen and thirty-nine weeks ended September 27, 2026 do not reflect any adjustments that may result from the consummation of the Transactions. The Company continues to evaluate the accounting for the Transactions, including the accounting for UBI's investment in UBH following the Recapitalization, the effects of which will be recognized upon the Closing. The Company expects the Transactions to close in the fourth quarter of 2026, subject to the receipt of the Company Stockholder Approval and the satisfaction or waiver of the other closing conditions; however, there can be no assurance that the Transactions will be completed on the expected timeline, or at all. See Note 17. Subsequent Events.
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