US snack food maker Snyder's-Lance to buy Diamond Foods for $1.91 bn
28 October 2015
US snack food maker Snyder's-Lance Inc today struck a deal to buy Diamond Foods Inc for about $1.91 billion in order to expand in the baked potato chips and fat-free popcorn segment.
Under the friendly cash and stock deal, Snyder's-Lance has offered to pay 0.775 in shares and $12.50 in cash, taking the total value to $40.46 per share.
The transaction also includes the assumption of debt of around $640 million.
Diamond's largest stockholder, private equity firm Oaktree Capital has agreed to vote in favour of the transaction.
Formed through the 2010 merger of Lance and Snyder's of Germany, Snyder's-Lance is the second-largest salty snack maker in the US.
Snyder's-Lance expects the transaction to be immediately accretive to the company's 2016 annualised earnings and generate synergies of around $75 million annually.
The North Carolina-based company expects the transaction to expand its footprint in "better-for-you" snacking and increases its existing natural food channel presence.
Snyder's-Lance also expects that this transaction to expand and strengthen its Direct Store Delivery network in the US, and provide it with a platform for growth in the UK and across Europe.
Diamond Foods is a snack food and culinary nut company focused on making convenient and delicious snacks as well as culinary nuts
The San Francisco-based company sells its products under five different brand names, Diamond of California, Kettle Brand and KETTLE Chips, Emerald and Pop Secret.
Snyder's-Lance manufactures and markets snack foods throughout the US and internationally.
Its products include pretzels, sandwich crackers, pretzel crackers, potato chips, cookies, tortilla chips, restaurant style crackers, nuts and other snacks.
Snyder's-Lance has manufacturing facilities in North Carolina, Indiana, Arizona, Florida, Ohio Pennsylvania, Georgia, Massachusetts, and Wisconsin.
Its products are sold under the Snyder's of Hanover, Lance, Cape Cod, Snack Factory Pretzel Crisps, Late July, Krunchers!, Tom's, Archway, Jays, Stella D'oro, Eatsmart, O-Ke-Doke, and other brand names along with other third party brands.
"Diamond Foods is a clear industry leader with exceptional brands, and we're excited to bring together these two highly complementary companies," said Carl Lee, Jr., president and CEO of Snyder's-Lance.
"Additionally, we will have an opportunity to grow internationally with Diamond's existing European platform, bringing unique products to consumers in that market. By combining the resources and expertise of Snyder's-Lance and Diamond, we expect to see widening profit margins with additional scale and an expanding line of our better-for-you products," he added.