Campbell Soup to buy snacks maker Snyder's-Lance for $4.87 b
19 December 2017
Campbell Soup Co, the world's largest soup maker, yesterday struck a deal to buy snacks maker Snyder's-Lance for $4.87 billion in order to expand its snack business.
Campbell Soup will pay Snyder's shareholders $50 per share in cash, a 6.8 per cent premium to Snyder's Friday closing price and a 27 per cent premium to Snyder's Wednesday closing price, a day before media reported on potential deal.
The acquisition, which has been approved by the boards of both companies, is expected to close early second quarter of calendar 2018.
Certain members of the Warehime family, who collectively own 13.2 per cent of Snyder's-Lance's stock, have agreed to vote their shares in support of the transaction.
Campbell Soup expects around $170 million in cost synergies by end of fiscal 2022.
Campbell plans to finance the acquisition through $6.2-billion of debt comprising a combination of long-term and short-term debt and said that it will suspend its earlier announced share repurchase program to maximise free cash flow for the purposes of paying down debt.
A successful deal would be the biggest acquisition in Campbell Soup's 148-year history.
Snyder's-Lance was formed through the 2010 merger of Lance and Snyder's of Hanover.
The North Carolina-based company makes pretzels, chips, cookies, sandwich crackers, nuts, candies and mints.
Its well-known brands include Snyder's of Hanover, Lance, Kettle Brand, KETTLE chips, Cape Cod, Snack Factory Pretzel Crisps, Pop Secret, Emerald and Late July.
Snyder's-Lance reported $2.2 billion in net sales for the trailing 12 months ended 30 September 2017.
With the addition of Snyder's-Lance's portfolio, Campbell's snacking business would increase from 31 per cent to 46 per cent of its annual $2.5 billion sales.
Campbell said that the transaction will expand its footprint in the $89 billion US snacking market to more than $10 billion.
Snyder's-Lance will become part of Campbell's Global Biscuits and Snacks division, which includes the company's Pepperidge Farm, Arnott's and Kelsen businesses, and the simple meals and shelf-stable beverages business in Australia, Asia Pacific and Latin America.
The division will combine Snyder's-Lance's portfolio with Campbell's iconic snacking brands including Goldfish crackers, Tim Tam biscuits, Milano cookies and Kjeldsens butter cookies.
''The combination of Snyder's-Lance brands with Pepperidge Farm, Arnott's and Kelsen will create a diversified snacking leader, drive sales growth and create value for shareholders. This acquisition will dramatically transform Campbell, shifting our center of gravity and further diversifying our portfolio into the faster-growing snacking category,'' said Denise Morrison, Campbell's president and CEO.
This is Campbell's sixth acquisition in five years as the company strives to reshape and diversify its portfolio.
It acquired Bolthouse Farms in 2012, organic baby-food company Plum and biscuit company Kelsen in 2013, fresh salsa and hummus maker Garden Fresh Gourmet in 2015, Diamond Foods in 2016 and organic soups and broths maker Pacific Foods early this year.