Utz Brands (NYSE:UTZ), a snack foods producer, closed at $14.06, up 88.72%. The stock surged after Utz announced a definitive agreement to be taken private in a $2.9 billion all-cash deal. It may only be an arbitrage play now, but there’s still a lesson for all investors.
Trading volume reached 60.6 million shares, coming in about 2,000% above its three-month average of 2.9 million shares. Utz Brands IPO’d in 2018 and has grown 46% since going public.
How the markets moved today
The S&P 500 (SNPINDEX:^GSPC) closed at 7,509, up 0.89%, while the Nasdaq Composite (NASDAQINDEX:^IXIC) finished at 25,837, up 1.29%. In packaged food — savory snack foods and salty snack manufacturing, The Campbell’s Company (NASDAQ:CPB) closed at $22.34, up 1.13%, while Mondelez International (NASDAQ:MDLZ) closed at $59.86, down 0.68%, as investors weighed the Utz take-private deal against broader snack-category trading.
What this means for investors
Utz shares soared after the company announced an all-cash buyout by Germany’s Intersnack Group. The $14.25 per share buyout price represented a 91% premium over yesterday’s closing price.
While it may be too late to benefit directly from the Utz buyout, it provides an important lesson investors can learn from.
Utz went public nearly six years ago at $10 per share. It’s been a tough ride for shareholders since then, but there have been recent positive signs, with adjusted free cash flow improving in Q1 and guidance suggesting it should continue.
Astute investors could have noted the dividend yield bounce to over 3% as the share price slid this year. That was a sign it might be time to buy, and those who did were rewarded handsomely today.
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