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Hershey close to acquiring healthy snacks company Krave -sources

January 28, 2015
Food & Drink
(Reuters) – Chocolate maker Hershey Co is in late-stage talks to acquire Krave, a maker of healthy beef, turkey and pork jerky snacks, according to people familiar with the matter.
 
The deal is expected to value Sonoma, California-based Krave at between $200 million and $300 million, the people said this week. An announcement could come as soon as this week, they added.
 
The sources requested anonymity because the talks are confidential. Hershey declined to comment, while a Krave representative did not immediately respond to a request for comment.
 
Hershey, which is set to announce its fourth-quarter earnings on Thursday, has been looking at ways to expand its products outside of its iconic confectionary brands into portable snacks, according to a source familiar with the company’s thinking.
 
Hershey’s most recent acquisition, a majority share of Chinese candy maker Shanghai Golden Monkey Food Co for $584 million in late 2013, was largely intended to build up the company’s international footprint.
 
Krave manufactures jerky snacks with flavors such as basil citrus, lemon garlic, chili lime and sweet chipotle. It sells to retailers that include Target Corp, Vitamin Shoppe Inc and Safeway Inc.
 
Krave was founded in 2010 by Jon Sebastiani, a fourth-generation winemaker looking for a healthy way to regain energy while training for the New York City Marathon.
 
The company received an investment from private equity firm Alliance Consumer Growth in 2013 for a minority stake.
 
Consolidation in the so-called better-for-you snacking category has picked up in the last year as consumers’ eating habits have begun to shift.
 
Recent deals have included JM Smucker Co’s acquisition of fruits and nuts manufacturer Sahale Snacks in August and TreeHouse Foods Inc’s purchase of trail mix maker Flagstone Foods in June.
 
The U.S. snack industry is a $35 billion market, according to market research firm IBISWorld, with annual growth of around 4 percent.
 
By Olivia Oran (Additional reporting by Mike Stone in New York)

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