Bolstering the company’s natural products portfolio, Snyder’s-Lance, Inc. signed a definitive agreement to acquire Diamond Foods, Inc. for approximately $1.91 billion.
The deal, which merges two iconic snacking brands, includes the assumption of $640 million in debt. Under the terms of the agreement, Diamond shareholders will receive 0.775 Snyder's-Lance shares and $12.50 cash for each Diamond Foods share.
“Diamond Foods is a clear industry leader with exceptional brands, and we’re excited to bring together these two highly complementary companies,” says Carl E. Lee Jr., president and CEO of Snyder’s-Lance. “Diamond has excelled in delivering exceptional product quality and innovation across its 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.”
Based in California, Diamond’s brands include Emerald nuts, Kettle Brand chips and Pop Secret Popcorn. News that the company was exploring a possible sale made headlines earlier this month.
The agreement has been approved by the boards of both companies, who are recommending their respective stockholders approve the transaction.
In addition to increasing Snyder’s-Lance’s annualized net revenue by approximately $2.6 billion, the transaction expands the company’s “better-for-you” snacking and increases the company’s existing natural food channel presence. Snyder’s-Lance expects this transaction will expand and strengthen its Direct Store Delivery network in the United States, and provide Snyder’s-Lance with a platform for growth in the UK and across Europe.
“The combination of Diamond and Snyder’s-Lance provides the opportunity to create significant value for our stockholders and offers immediate benefits for consumers,” says Brian J. Driscoll, president and CEO 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.”
The transaction is expected to close in 2016.