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Snyder's-Lance completes Diamond Foods acquisition for $1.91bn

FBR Staff Writer Published 01 March 2016

US-based snacks maker Snyder's-Lance has completed the acquisition of Diamond Foods for approximately $1.91bn in cash and stock including debt of $640m.

Kettle chips

Under the agreement, Diamond Foods shareholders would receive 0.775 Snyder's-Lance shares and $12.50 in cash for every share of Diamond Foods.

The acquisition of Diamond Foods, the maker of Emerald almonds and Kettle potato chips will make Snyder's-Lance a bigger snack foods company with diversified product portfolio.

With the deal, the snacks maker would own brands such as Kettle Brand potato chips, KETTLE Chips, Pop Secret popcorn, Emerald snack nuts, and Diamond of California culinary nuts, thereby enabling it to become more competitive with enhanced capacities.

Inclusion of Diamond Foods' brands will strengthen Snyder's-Lance strategic plan of increasing the annualized net revenue of the company to $2.6bn.

The transaction will also expand Snyder's-Lance footprint in the healthy snacks segment by increasing the natural foods channel presence.

Snyder's-Lance expects that through this transaction it can help strengthen its Direct Store Delivery (DSD) network in the US and provide a platform for growth in the UK and across Europe.

Snyder's-Lance is also expecting $75m cost savings in terms synergies, and it plans to re-invest $10m towards the growth of the merged entity. It expects the transaction to be accretive to annualized earnings in 2016.

Snyder's-Lance president and CEO Carl E. Lee, Jr. said: "Diamond has been a powerful industry leader in snack foods with exceptional brands and we're excited to bring these two great teams together.

"With products that deliver exceptional taste, quality and innovation across our entire portfolio, we know the Diamond Foods brands will work perfectly alongside our Snyder's-Lance lineup.

"By bringing together the resources and expertise of the Snyder's-Lance and Diamond teams, we expect to see widening profit margins as we gain synergies and progress though our integration plans over the next 12 to 24 months.

"With the combined power of our sales teams, we will continue driving new product innovation as we broaden our geographic and consumer reach. We welcome the Diamond team to the Snyder's-Lance family and look forward to winning together."

In last October, the companies had signed a definitive agreement for the acquisition.

Following the formalization, the deal gained approval from the board of directors of both the companies. Diamond Foods stockholders will own around 26% of the merged entity based on outstanding share counts of 28 October 2015.

Image: Kettle brand is now owned by Snyder's Lance. Photo: Courtesy of Badagnani (talk)/Wikipedia.