Snack maker Snyder’s-Lance, Inc., has entered into an agreement to acquire Diamond Foods for $1.91 billion, which includes the approximately $640 million in Diamond Foods debt.
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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 strategic combination of Snyder’s-Lance and Diamond Foods creates an innovative, highly complementary and diversified portfolio of branded products.
Both boards have approved the transaction, and Oaktree Capital, Diamond’s largest shareholder, will vote in favor of the deal.
Diamond owns Emerald snack nuts and Diamond of California culinary nuts, as well as Kettle Brand potato chips, Pop Secret popcorn.
The deal illustrates how San Francisco-based Diamond evolved from a fast-growing company built via acquisitions to a takeover target.
Snyder’s-Lance also expects that this transaction to expand and strengthen its Direct Store Delivery network in the USA, and provide it with a platform for growth in the United Kingdom and across Europe.
When it closes, Diamond President and CEO Brian Driscoll will join the Snyder’s-Lance board of directors.
Snyder’s-Lance, whose sales have beaten analysts’ estimates in the past three quarters, on Wednesday also reported lower-than-expected sales for the latest third quarter. “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”. Additionally, we will have an opportunity to grow internationally with Diamond’s existing European platform, bringing unique products to consumers in that market. Snyder’s-Lance has advanced 18 percent this year. Diamond’s bid to buy Pringles from former owner Procter & Gamble Co.in 2012 was derailed after an accounting probe forced it to restate earnings, leading to the ouster of then-Chief Executive Officer Michael J. Mendes.
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Subject to customary closing conditions, the acquisition is expected to be completed in early 2016.
