Snyder’s-Lance Inc. announced Wednesday it will buy Diamond Foods Inc. for roughly $1.27 billion in order to increase its inventory of healthy snacks.
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This deal has already been approved by boards of directors for each company.
Lance Inc. and Snyder’s of Hanover merged in 2010 to form Snyder’s-Lance.
Snyder’s-Lance also released its third quarter earnings report today.
The purchase of Diamond would give Snyder’s a bigger foothold in the natural-foods aisles of conventional and specialty supermarkets and club stores, executives said. It will also capitalize on opportunities to grow internationally with Diamond’s existing European platform. The Company is engaged in the manufacturing, distribution, marketing and sale of snack food products. On a per-share basis, Snyder’s-Lance earned 26 cents a share excluding special items, or 22 cents a share from continuing operations.
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.
Sales for the quarter totaled $416.8 million, up 1.8 percent from a year ago but below the Wall Street consensus estimate of $435.3 million. Snyder’s-Lance owns Snyder’s of Hanover and Cape Cod and Snyders said the deal brought together two highly complementary companies.
One challenge that may arise for the Snyder’s-Lance management team is walnut supply and demand, which is at the heart of Diamond’s nut business.
Diamond Foods, Inc. (Diamond) is a packaged food company focused on building, acquiring and energizing brands.
The deal is subject to regulatory approval and approval from each company’s shareholders. In conjunction with the agreement, certain stockholders of each company have entered into voting agreements and, subject to the agreements’ terms and conditions, have agreed to vote their shares in favor of the transaction.
“The combination of Diamond and Snyder’s-Lance provides the opportunity to create significant value for our stockholders and offers immediate benefits for consumers”, Diamond Foods president CEO Brian Driscoll said.
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Snyder’s Lance expects to continue to pay a dividend of $0.64 per share.
