The Hershey Company has announced plans to acquire Dot's Pretzels LLC, owner of Dot's Homestyle Pretzels.

The company says Dot's Pretzels is a perfect complement to Hershey's growing salty snacking portfolio and would create an opportunity to reach new consumers in new occasions, advancing Hershey's snacking powerhouse vision. 

"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 Hershey President and CEO Michele Buck. "With a unique range of bold, distinctive seasonings and a flavorful crunch that creates a premium pretzel experience for consumers, Dot's Pretzels stands apart from all other products in the pretzel category and represents 55 percent of the pretzel category's growth during the past year."

Created more than a decade ago in North Dakota by founder Dot Henke in her home kitchen, Dot's Pretzels started as a special family snack that she shared with family, friends and neighbors to get through long, cold North Dakota winters. Dot built her business by holding to the highest quality standards, a tradition the company continues today so that each bag of Dot's Pretzels tastes as if it were made in Dot's home kitchen using her original secret formula.  

"I created my pretzels to share with those people closest to me and have built the business with the idea of sharing them with everyone," Henke said. "With Hershey behind this amazing brand, I am confident that anyone who would like to enjoy these deliciously bold pretzels will have the opportunity." 

Hershey also plans to acquire Pretzels Inc. from an affiliate of Peak Rock Capital, a private investment firm with investments in the food and beverage industry. Pretzels Inc. is a co-manufacturer for Dot's Pretzels and several other customers and is a leading innovator in the pretzel category. 

Based in Bluffton, Indiana, Pretzels Inc. operates three manufacturing locations in Indiana and Kansas. When the transactions are complete, Hershey will acquire these three manufacturing locations in addition to four pretzel-seasoning facilities to be acquired with Dot's. The company says the Pretzels Inc. acquisition will give Hershey pretzel expertise and the manufacturing capabilities to support Dot's growth, as well as the continued growth in the entire pretzel category.

"Pretzels Inc. will help us expand Hershey's snacking and production capabilities while keeping the special connection to Dot's," Buck said. "It will be important as we continue to grow this already fast-growing brand and create new products in the broader pretzel category."

The total purchase price for these two proposed acquisitions is approximately $1.2 billion, or approximately $1 billion of investment net of expected future tax benefits. It will be financed with cash on hand as well as short-term borrowings. The estimated aggregate net sales for the two businesses were approximately $275 million for the 12 months ended September 2021. The acquisitions, subject to customary regulatory approvals, are expected to close by the end of 2021.