Amplify Snack Brands Enters into Definitive Agreement to Acquire Tyrrells’ International Portfolio of Better-For-You, Premium Snack Brands

Diversifies and Expands Branded Product Offerings to Create an
International Better-For-You Snacking Company with Approximately $317
Million in Pro Forma LTM Net Sales

Leverages Amplify’s and Tyrrells’ Market Leading Brands to
Significantly Broaden Customer Reach and Increase International
Operating Scale and Presence

Expected to be Accretive to Amplify’s 2017 and 2018 Diluted Earnings
Per Share

AUSTIN, Texas–(BUSINESS WIRE)–Amplify Snack Brands, Inc. (“Amplify” or the “Company”) (NYSE:BETR) and
Crisps Topco Limited and Subsidiaries (“Tyrrells”) today announced that
they have executed a definitive agreement under which Amplify will
acquire Tyrrells, an international, market-leading and rapidly growing
premium Better-For-You snack food business. The transaction has been
unanimously approved by Amplify’s board of directors. Under the terms of
the £300 million transaction, Tyrrells’ current owner Investcorp and
members of the Tyrrells management team will receive approximately £278
million in cash and approximately 2.1 million shares of Amplify’s common
stock.1 Amplify expects to close the transaction by the end
of the third quarter of calendar 2016. Amplify expects that this
acquisition will be accretive to both the Company’s 2017 and 2018
diluted earnings per share.

Founded in 2002 and headquartered in Herefordshire, England, Tyrrells is
a diversified, international snacking company that manufactures and
markets iconic, market-leading brands including Tyrrells Potato Crisps®,
Tyrrells branded Vegetable Crisps, Tyrrells Poshcorn®, Tyrrells
Nibbles®, Tyrrells Tortillas®, in the United Kingdom, Europe and many
other international markets; Yarra Valley, manufacturer of Thomas
Chipman and The Wholesome Food Company brands in Australia; and Aroma
Snacks, manufacturer of Lisa’s kettle chips in Germany. Importantly, the
product characteristics and flavor profiles of these on-trend premium
brands align with Amplify’s Better-For-You snacking strategy. With
distribution across a highly diverse set of international sales
channels, Tyrrells generated approximately $111 million in net sales for
the last twelve months (“LTM”) ended June 30, 2016, and achieved a
compound annual net sales growth rate of 23% from fiscal year 2013 to
fiscal year 2016. During the last twelve months ended June 30, 2016,
Tyrrells generated approximately £18.3 in management presented EBITDA,
as adjusted through due diligence in connection with the transaction.2
Tyrrells is the #2 player in the hand-cooked premium chip market in the
UK and the #1 player in France, with existing and growing penetration in
other key Western European markets. Tyrrells has a strong presence
across the potato chip, vegetable chip, corn chip and popcorn product
categories and is supported by five international manufacturing
facilities in England, Germany, and Australia.

“Together, Amplify and Tyrrells will partner to create a truly unique
international Better-For-You snack food leader that can continue to
drive robust future revenue and earnings growth,” said Tom Ennis,
Amplify’s President and Chief Executive Officer. “We believe that the
combination with Tyrrells will create significant long-term value for
all of our stakeholders. Similar to Amplify, Tyrrells has a strong
entrepreneurial spirit and successful track record of transforming
categories and creating growth brands. We welcome David Milner and his
team, and look forward to the opportunity to increase our operating
scale, international reach, and product and brand diversity as we
capture revenue synergies. We plan to capitalize on each company’s
market leadership and sales forces to drive higher revenue growth than
either company could independently accomplish.”

David Milner, Chief Executive Officer of Tyrrells commented, “We’re
excited to join Amplify’s Better-For-You snack food platform as we
combine our highly complementary businesses and brands to build an even
stronger company for future international success. We were lucky enough
to be able to choose our long-term partner and this partnership provides
a significant opportunity to accelerate sales growth for Tyrrells’
brands in the United States, as well as the scope for Amplify’s brands
in the international marketplace. Building upon the strength of each of
our respective customer relationships and leveraging Tyrrells’
manufacturing capabilities, we shall be entering new territories as well
as broadening our reach in existing markets.”

Strategic and Financial Benefits
The transaction will create
a large and diversified pure-play international Better-For-You snack
food company. Amplify believes the combination will provide the
following strategic and financial benefits:

  • Diversifies and Expands Better-For-You Branded Product Offerings:
    The combination of Amplify’s existing portfolio of brands including
    SkinnyPop, Paqui and Oatmega, with the leading international brands of
    Tyrrells, Thomas Chipman, Wholesome Goodness, and Lisa’s creates a
    combined international company with approximately $317 million in pro
    forma LTM net sales ended June 30, 2016. The acquisition creates a
    company with meaningful brand, product category, retail channel and
    geographic diversity. Following the closing of the transaction,
    Amplify’s North American footprint would represent approximately 63%
    of net sales, the United Kingdom would represent approximately 23% of
    net sales, and the Rest of the World would represent approximately 14%
    of net sales, based on pro forma net sales for the last 12 months
    ended June 30, 2016 for both companies.
  • Accelerated International Expansion and Whitespace Realization:
    The acquisition of Tyrrells allows Amplify to more rapidly realize the
    opportunity provided by global Better-for-You snacking trends.
    Complementary distribution channels and sales teams provide actionable
    whitespace opportunities and potential to accelerate revenue growth
    for both Tyrrells’ and Amplify’s current brand portfolios. Minimal
    product and business overlap create two-way cross-sell opportunities
    to help accelerate entry into new markets and broaden reach in
    existing markets. Amplify will benefit from the presence of an
    international sales team with strong customer relationships in over 40
    countries, while Tyrrells’ brands can leverage Amplify’s outstanding
    US-focused capabilities.
  • Increased Scale Provides Significant Future Benefits: In
    addition to benefiting from greater operating scale and increased
    procurement savings, Tyrrells’ outstanding manufacturing expertise and
    international capabilities will provide future cost benefits to the
    Company. Beyond these cost benefits, the combined company expects to
    realize additional benefits of scale via sharing of best practices,
    leveraging established infrastructure and strengthening retail
    partnerships.
  • Addition of Experienced Executive Team: The transaction will
    add a talented group of executives, with strong international consumer
    packaged goods backgrounds and a proven track record of growth, to the
    core Amplify team. Upon closing of the transaction, Tyrrells’
    management team will remain in place with David Milner continuing as
    President International for Amplify, reflecting his commitment and
    belief in the future success of the combined company. Other key
    members of Tyrrells’ senior management team will join Amplify to help
    manage the international brands and manufacturing operations.

Transaction Details
Under the terms of the transaction
agreement, Tyrrells will become a wholly-owned subsidiary of Amplify.
The transaction is valued at £300 million, comprising of approximately
£278 million in cash and approximately 2.1 million shares of Amplify’s
common stock issued to Investcorp and members of Tyrrells management
team, valued at £22 million. Amplify plans to finance the cash portion
of this transaction with debt and has secured financing commitments from
Jefferies Finance LLC, Credit Suisse AG, Credit Suisse (USA) LLC, and
Goldman Sachs Bank USA. Pro forma for the transaction, net leverage is
expected to be approximately 5.7x.3 Amplify remains committed
to maintaining long-term net leverage in the 4.0x to 4.5x range and
expects to be well within that leverage range, via organic growth and
subsequent free cash generation, by the end of 2017. The transaction is
expected to close by the end of the third quarter of calendar 2016,
subject to customary closing conditions including approval by regulators.

Advisors
Jefferies LLC is serving as financial advisor and
Goodwin Procter LLP is acting as legal counsel to Amplify. Houlihan
Lokey is serving as financial advisor and Shearman & Sterling LLP is
acting as legal counsel to Investcorp and Tyrrells.

Conference Call and Webcast
The Company will host a
conference call with members of the executive management team to discuss
this transaction and its second quarter 2016 financial results today,
Monday, August 8, 2016 at 7:00 a.m. Central time (8:00 a.m. Eastern
time). Investors interested in participating in the live call can dial
877-407-9039 from the U.S. International callers can dial 201-689-8470.

In addition, the call will be broadcast live over the Internet hosted at
the “Investor Relations” section of the Company’s website at http://amplifysnackbrands.com.

The webcast will be archived for 30 days. A telephone replay will be
available approximately two hours after the call concludes and will be
available through Monday, August 22, 2016, by dialing 877-870-5176 from
the U.S., or 858-384-5517 from international locations, and entering
confirmation code 13641697.

About Amplify Snack Brands, Inc.
Headquartered in Austin,
Texas, Amplify Snack Brands is a high growth snack food company focused
on developing and marketing products that appeal to consumers’ growing
preference for Better-For-You (BFY) snacks. Our brands SkinnyPop®,
Paqui® and Oatmega® embody our BFY mission of “snacking without
compromise” and have amassed a loyal customer base across a wide range
of food distribution channels in the United States and Canada. For
additional information, please visit: http://amplifysnackbrands.com.

About Crisps Topco Limited and Subsidiaries
Crisps Topco
Limited and Subsidiaries (“Tyrrells”) is based on a farm in the
picturesque countryside in the English county of Herefordshire and since
its creation in 2002, has grown to become one of the UK’s best loved
premium snack brands. The Tyrrells portfolio consists of award-winning
Potato Crisps, Vegetable Crisps, ‘Furrows’ Crinkle Cut Crisps, Poshcorn
– premium popcorn, and Tyrrells ‘Alternatives’. Tyrrells Crisps has
recently scooped a Queens Award for Enterprise and is proud to hold over
64 gold Great Taste Awards, more than any other premium crisp producer.

Forward-Looking Statements
This press release contains
certain forward-looking statements, including statements with regard to
the proposed acquisition of Crisps Topco Limited and subsidiaries.
Forward-looking statements generally relate to future events or our
future financial or operating performance. In some cases, you can
identify forward-looking statements because they contain words such as
“may”, “will”, “should”, “expects”, “plans”, “anticipates”, “could”,
“intends”, “target”, “projects”, “contemplates”, “believes”,
“estimates”, “predicts”, “potential” or “continue” or the negative of
these words or other similar terms or expressions that concern our
expectations, strategy, plans or intentions. Forward-looking statements
and the consummation of the proposed transaction and the terms thereof
are subject to known and unknown risks and uncertainties and are based
on potentially inaccurate assumptions that could cause actual results to
differ materially from those expected or implied by the forward-looking
statements. If any such risks or uncertainties materialize or if any of
the assumptions prove incorrect, our results could differ materially
from the results expressed or implied by the forward-looking statements
we make.

The important factors that could cause actual results to differ
materially from those in any forward-looking statements include, but are
not limited to, the following: (i) our ability to successfully
consummate the proposed acquisition of Crisps Topco Limited and
subsidiaries on the terms described in this press release or at all,
(ii) the satisfaction of all necessary closing conditions and approvals
for the proposed acquisition, (iii) our ability to successfully
integrate Crisps Topco Limited and subsidiaries with our existing
operations following the consummation of the proposed acquisition, (iv)
changes in consumer preferences and discretionary spending may have a
material adverse effect on our brand loyalty, net sales, results of
operations and financial condition, (v) we rely on sales to a limited
number of distributors and retailers for the substantial majority of our
net sales, and the loss of one or more such distributors or retailers
may harm our business, and (vi) sales of a limited number of SkinnyPop
products and flavors contributed all of our historical profitability and
cash flow and a reduction in the sale of our SkinnyPop products would
have a material adverse effect on our ability to remain profitable and
achieve future growth.

Further information on these and other factors that could affect our
financial results and the forward-looking statements in this press
release are included in our Annual Report on Form 10-K for the year
ended December 31, 2015 and our Quarterly Report on Form 10-Q for the
quarter ended March 31, 2016, in each case, as filed with the Securities
and Exchange Commission (“SEC”) and in other filings we will make with
the SEC from time to time, particularly under the caption “Risk Factors”.

You should not place undue reliance upon forward-looking statements as
predictions of future events. Amplify has based the forward-looking
statements contained in this press release on its current expectations
and projections about future events and trends that it believes may
affect its business, financial condition, results of operations and
prospects. The forward-looking statements made in this press release
relate only to events as of the date on which the statements are made.
Amplify undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by law.

Business and Financial Information of Crisps Topco Limited and
Subsidiaries

This press release contains certain information
regarding the business, operations and financial results of Crisps Topco
Limited and its subsidiaries. This information has been prepared by
Crisps Topco Limited and its subsidiaries, and not by Amplify. The
financial results of Crisps Topco Limited and subsidiaries that are
presented in this press release have been prepared by Crisps Topco
Limited in accordance with generally accepted accounting principles in
the United Kingdom (“UK GAAP”) and not generally accepted accounting
principles in the United States (“US GAAP”). You should be aware that
there are differences between UK GAAP (used by Crisps Topco Limited) and
US GAAP (used by Amplify). If the proposed acquisition is consummated,
Amplify will file with the Securities and Exchange Commission, within 71
calendar days following the date that Amplify is required to file a
Current Report on Form 8-K announcing the consummation of the
acquisition, the historical financial statements of Crisps Topco Limited
and the pro forma financial information that is required under
Regulation S-X.

The financial results of Crisps Topco Limited and subsidiaries have not
been audited or reviewed by Amplify’s independent auditors. The
historical past practices of Crisps Topco Limited and subsidiaries in
the preparation of their historical financial statements may differ from
the practices and interpretations applied by Amplify. As such, the
historical financial results of Crisps Topco Limited and subsidiaries
that are ultimately provided by Amplify or reflected in Amplify’s
financial statements in future periods may vary from the information
provided herein.

Crisps Topco Limited and subsidiaries have historically maintained a
fiscal year end on or around March 31 (on a 52-week per year calendar),
as compared to Amplify’s fiscal year end of December 31. To the extent
necessary, the historical financial results of Crisps Topco Limited and
subsidiaries have been calendarized to match Amplify’s fiscal year end,
solely for presentation purposes.

LTM and Pro Forma Financial Measures
This press release
contains certain financial information that is presented as “LTM ended
June 30, 2016” and/or “pro forma” for the proposed acquisition by
Amplify of Crisps Topco Limited and subsidiaries.

“LTM ended June 30, 2016” financial information as used in this press
release represents financial data (i) for Amplify, for the 12 months
ended June 30, 2016, calculated by adding the financial data for the six
months ended June 30, 2016 to the financial data for the year ended
December 31, 2015 and subtracting the financial data for the six months
ended June 30, 2015, (ii) for Crisps Topco Limited and subsidiaries, for
the four quarters ended July 1, 2016, calculated by adding the financial
data for the quarter ended July 1, 2016 to the financial data for the
year ended April 1, 2016 and subtracting the financial data for the
quarter ended June 26, 2015.

Unless otherwise indicated herein, “pro forma” financial information as
used in this press release represents the arithmetic combination of the
results of Amplify and Crisps Topco Limited and subsidiaries over the
periods presented. In addition, the historical financial results of
Crisps Topco Limited and subsidiaries have been converted from pounds
sterling (£) to USD ($) based on a GBP / USD spot rate of 1.31 as of
August 5, 2016, solely for presentation purposes.

Set forth below is a table showing the calculation of “Pro Forma LTM Net
Sales” as presented in this release (all Tyrrells results converted to
USD, dollars presented in millions, unaudited):

                 
        Amplify       Crisps Topco Limited       Pro Forma
Net Sales LTM ended June 30, 2016       $206.5       $110.6       $317.1
 

The “pro forma” financial information used in this press release does
not represent pro forma financial information prepared in accordance
with Article 11 of Regulation S-X. As noted above underBusiness
and Financial Information of Crisps Topco Limited and Subsidiaries”, if
the proposed acquisition is consummated, Amplify will file with the
Securities and Exchange Commission, within 71 calendar days following
the date that Amplify is required to file a Current Report on Form 8-K
announcing the consummation of the acquisition, the pro forma financial
information in respect of the proposed acquisition that is required
under Regulation S-X.

Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures
regarding Crisps Topco Limited. These non-GAAP financial measures, which
include presentations of EBITDA and Adjusted EBITDA, have been presented
in order to aid understanding in Crisp Topco Limited’s business
performance. EBITDA and Adjusted EBITDA are explained and reconciled to
net income, the closest comparable GAAP measure, in the tables contained
in Appendix A to this release.

Amplify management and Crisps Topco Limited management believe that
EBITDA and Adjusted EBITDA, which are non-GAAP financial measures, are
meaningful to investors because they provide a view of our businesses
with respect to ongoing operating results. EBITDA and Adjusted EBITDA
are not and should not be considered alternatives to net income or any
other figures calculated in accordance with GAAP, or as an indicator of
operating performance. Amplify and Crisps Topco Limited’s method of
calculation of EBITDA and Adjusted EBITDA may differ from methods used
by other companies. Amplify management and Crisps Topco Limited
management believes that these non-GAAP measurements are important to
help gain an understanding of overall operating results in the periods
presented. Such non-GAAP measurements are not recognized in accordance
with GAAP and should not be viewed as an alternative to GAAP measures of
performance.

                 

APPENDIX A

Crisps Topco Limited and Subsidiaries

Reconciliation of Net Income to Presentations of EBITDA and
Adjusted EBITDA

 
£ in Millions; Fiscal Year-End 3/31; Unaudited
2014A     2015A     2016A     LTM 6/30/2016
Net Income (7.5 ) (9.5 ) (2.5 ) (2.8 )
Interest Expense (1) 7.8 12.3 12.8 13.3
Taxes (0.2 ) 1.3 0.9 0.8
Depreciation 1.1 2.0 2.3 2.5
Amortization 2.7 4.0
Other (0.0 )     (0.0 )     (0.1 )     (0.2 )
Statutory EBITDA (2) £ 3.8     £ 10.0     £ 13.4     £ 13.7
 

Tyrrells Management Adjustments:

PF Impact of Yarra Valley and Lisa’s Acquisitions (3) 0.7 1.6 1.5 1.3
Constant Currency Adjustment (0.1 ) 0.4 1.0 0.8
Acquisition Related Costs (4) 5.1 0.1 1.1 1.3
Removal of Week 53 (5) (0.3 ) (0.3 )
Other Non-Recurring Adjustments (6) 1.3       2.4       2.0       2.3  
Tyrrells Management Presented EBITDA £ 10.8     £ 14.5     £ 18.8     £ 19.1
 

Diligence Adjustments:

Amplify Diligence Adjustments (7) (0.2 )     (0.3 )     (0.8 )     (0.7 )
Tyrrells Management Presented EBITDA, as Adjusted through
Diligence
£ 10.6     £ 14.2     £ 18.0     £ 18.3
 

Run-Rate Adjustments:

Run-Rate Adjustments (8)                   1.0  
Tyrrells Diligence Adjusted Run-Rate EBITDA £ 10.6     £ 14.2     £ 18.0     £ 19.3
 
1.       Interest expense consists of (i) non-cash interest that was incurred
by Tyrrells on certain related party debt obligations that were
issued in connection with a previous restructuring of Tyrrells and
(ii) cash interest paid by Tyrrells on its outstanding bank debt.
2. Statutory EBITDA includes EBITDA that was contributed by businesses
acquired during the period solely from the date of the completion of
such acquisitions forward.
3. Represents the estimated impact to Tyrrells’ consolidated EBITDA
that would have been contributed by both the Yarra Valley and Lisa’s
businesses as if such businesses had been acquired as of the
beginning of each period. Yarra Valley was acquired by Tyrrells in
August 2015 and Lisa’s was acquired by Tyrrell’s in March 2016. Does
not represent pro forma financial information prepared in accordance
with Article 11 of Regulation S-X.
4. Represents non-recurring deal and diligence costs associated with
the Investcorp, Yarra Valley, and Lisa’s acquisitions.
5. Normalized EBITDA for the impact of a 53 week fiscal year in 2016,
as compared to other years that contain 52.
6. Represents other non-recurring adjustments such as one-time excess
co-manufacturing costs incurred due to capacity constraints in
popcorn and potato crisps, higher manufacturing costs associated
with the production of potato crisps due to capacity constraints,
other abnormal input costs, management reorganization costs,
distributor breakage costs, and one-time legal and consulting fees.
7. Represents certain reversals to Management Adjustments that Amplify
did not consider to be one-time in nature as well as a
reclassification of an accrual.
8. Represents the run-rate impact of new secured distribution, new
terms agreed to with customer, the full-year effect of new product
listings and new customers, contracted input price increases /
decreases, and incremental overhead required to deliver additional
volumes.
 

1 Share consideration is fixed based on closing August 5,
2016 Amplify’s stock price and GBP to USD exchange rate of 1.

Contacts

ICR
Investors
Katie Turner, 646-277-1228
katie.turner@icrinc.com
or
Media
Cory
Ziskind, 646-277-1232
cory.ziskind@icrinc.com

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