Powder & Bulk Solids is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Snyder's-Lance to Acquire Diamond Foods Inc.

Snyder's-Lance Inc. and Diamond Foods Inc. announced Thursday that they have entered into a definitive agreement under which Snyder's-Lance will acquire all outstanding shares of Diamond Foods in a cash and stock merger transaction for approximately $1.91 billion, including the assumption of approximately $640 million of indebtedness.

Under the terms of the agreement, Diamond stockholders will receive 0.775 Snyder's-Lance shares and $12.50 in cash per Diamond Foods share upon closing of the transaction. The agreement has been approved by the boards of directors of both companies, who recommend that their respective stockholders approve the transaction.

Oaktree Capital, Diamond's largest stockholder, has agreed to vote in favor of the transaction. Diamond Foods stockholders will own approximately 26% of the combined company based on today's outstanding share counts.

The strategic combination of Snyder's-Lance and Diamond Foods creates an innovative, highly complementary and diversified portfolio of branded products. Diamond Foods is a leading snack food company with five brands, including Kettle Brand potato chips, Kettle Chips, Pop Secret popcorn, Emerald snack nuts, and Diamond of California culinary nuts. Each
Diamond Foods brand brings unique strengths that fit with Snyder's-Lance's strategic plan, while increasing the company's annualized net revenue to approximately $2.6 billion.

The transaction expands Snyder's-Lance's footprint in "better-for-you" snacking and increases the company's existing natural food channel presence. Snyder's-Lance expects that this transaction will expand and strengthen its Direct Store Delivery ("DSD") network in the U.S., and provide Snyder's-Lance with a platform for growth in the UK and across Europe.

Snyder's-Lance expects the transaction to be immediately accretive to the company's 2016 annualized earnings. The significant synergy potential includes an estimated $75 million in annual cost savings, of which approximately $10 million will be re-invested in the business to achieve the combined company's growth plans. This excludes transaction-related and integration costs. Synergies are expected to come from increased scale of the combined company, leveraging Snyder's-Lance existing distribution system and cost reductions. In addition Snyder's-Lance will gain the benefit of tax net operating losses (NOL's) with a net present value of $110 million dollars.

"Diamond Foods is a clear industry leader with exceptional brands, and we're excited to bring together these two highly complementary companies," said Carl E. Lee, Jr., president and chief executive officer of Snyder's-Lance. "Diamond has excelled in delivering exceptional product quality and innovation across their entire product portfolio, with products and ideas that work perfectly alongside our Snyder's-Lance brands. We plan to take full advantage of the combined sales forces of
Snyder's-Lance and Diamond to drive stronger top line growth than either company could achieve alone. 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. We welcome the Diamond team to the Snyder's-Lance family and look forward to winning together."

"The combination of Diamond and Snyder's-Lance provides the opportunity to create significant value for our stockholders and offers immediate benefits for consumers," said Brian J. Driscoll, president and chief executive officer of Diamond Foods.

"This transaction will create a diversified, branded snacking portfolio with greater operating scale. In addition, we expect the transaction will provide us with greater resources to further develop new product innovation and broaden our geographic reach and route to market across complementary customer bases. We are excited about the opportunities this combination will create for consumers and our stockholders."

For related articles, news, and equipment reviews, visit our Equipment Zones

Click here for a List of Equipment Manufacturers

TAGS: News
Hide comments
account-default-image

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish