Continuing with its expansion through acquisitions during 2008 even as it downsizes to beat the economic slowdown,  PepsiCo Inc said it is acquiring Canadian sunflower and pumpkin seeds maker Spitz International Co for an undisclosed sum or other details of transaction. The agreement becomes effective upon closing.

The acquisition of the Canadian firm, founded in 1982 as Alberta Sunflower Seeds by Dutch farmer couple Tom and Emmy Droog, will enable Pepsi to expand the market share its 411-billion snack foods division Frito-Lay in Cananda, and after the closing of the transaction, Spitz will report from its Bow Island headquarters in Southern Alberta to Frito-Lay's North America unit.

The acquisition will strengthen Frito-Lay's market share in the nuts and seeds category. Spitz, which has strong growth potential across North America, complements Frito-Lay's growing portfolio of health-snack options, such as True North nut snacks, introduced this year.

Spitz seeds are distributed throughout Canada and are readily available in the US markets. its sunflower seeds are available in six flavors (salted, seasoned, dill pickle, spicy, chili lime and smokey barbeque). Its pumpkin seeds are available in three flavors (salted, seasoned and dill pickle). All of Spitz's seeds are grown, harvested and roasted through its own patented process.

"We are looking forward to having Spitz's leading seed brands in the Frito-Lay family," said Al Carey, Frito-Lay North America president and CEO. "Spitz enables Frito Lay Canada to grow our seed business in Canada and help us expand in the US, while supporting PepsiCo's broader health and wellness strategy. Spitz has a very strong brand in Canada, and we plan to create new growth opportunities for the brand across North America."

"Frito Lay Canada is one of Canada's largest food companies and we have a proud history of growing small Canadian companies to expand the distribution of their products," said Marc Guay, president, Frito Lay Canada. "We're excited about the opportunities with Spitz and we'd like to thank Tom and Emmy Droog for everything they've done to build a terrific business."

The Droogs, who brought with them a passion for healthy living and farming, began growing sunflowers in 1982 and first marketed their first sunflower seeds as bird feed before recognising an opportunity to expand into the consumer confectionary market. Spitz not only became one of the first companies in North America to produce flavored sunflower seeds, but also one of the first to market sunflower seeds in re-sealable bags. Soon after Spitz became one of the first North American companies to market flavored pumpkin seeds.

"After nearly 30 years of hard work we're excited to see our company and brand grow and expand across North America," said Tom Droog, Spitz co-founder. "Our modest plans have surpassed our expectations and now with a company like Frito-Lay behind Spitz we know our legacy will continue and our company will be in a better position to reach our goal: to become the leading sunflower and pumpkin seed brand in North America."

Earlier in March this year PepsiCo and Israeli branded foods and beverages maker Strauss Group, with whom its links go back to 1992, formed an equal joint venture to operate Sabra, the top-selling and fastest-growing maker of hummus. The joint venture will produce and sell fresh dips and spreads in the US and Canada.

Sabra had sales of $65 million in 2007. Last year, total US sales of hummus grew to $192 million.