Snyder’s-Lance is looking to gain a stronger foothold in the healthier-snack market with its $1.91 billion purchase of Diamond Foods, which the Charlotte-based snack-maker completed Tuesday.
Snyder’s-Lance announced the transaction in October. Under the deal, shareholders of San Francisco-based Diamond Foods receive 0.775 Snyder’s-Lance shares and $12.50 in cash per share of Diamond Foods, according to a filing this week. Also under the deal, Snyder’s-Lance is assuming approximately $640 million of Diamond’s debt.
Snyder’s, known for Hanover’s pretzels and Lance peanut butter sandwich crackers, has been expanding its portfolio of “better-for-you” offerings as consumer preferences evolve, and the addition of Diamond is intended to support that goal.
Diamond’s brands include Kettle Brand chips, Pop Secret popcorn and Emerald nuts.
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The intent is for “better-for-you” snacks to eventually comprise one-third of Snyder’s-Lance’s business, Chief Executive Officer Carl Lee said last year. In May 2014, when Snyder’s bought Wisconsin baked-snack maker Baptista’s Bakery, healthier snacks made up about a quarter of its portfolio. That was before the company bought a healthy snack maker called Late July, and announced its expansion into the gluten-free market.
In other company news, Snyder’s-Lance reported fourth-quarter sales and earnings Monday evening that were down from the same period a year ago and that narrowly missed analysts’ forecasts.
Snyder’s-Lance shares closed down 6.45 percent at $30.60 on Tuesday, and Diamond Foods closed up 0.97 percent at $37.56.
“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,” Lee said in a statement.
As part of the deal, Diamond Foods CEO Brian Driscoll has been appointed to the Snyder’s-Lance board of directors, effective immediately.
The combined company, Snyder’s-Lance said, has a net revenue of approximately $2.6 billion.
Snyder’s estimates an annual cost savings of $75 million from the deal, which is expected to boost the company’s 2016 earnings, Snyder’s said. About $10 million will be re-invested in the company’s growth plans.
Snyder’s-Lance formed when Charlotte-based Lance Inc. merged with pretzel maker Snyder’s of Hanover in 2010. The company employs about 1,500 workers in Charlotte, including about 250 in its corporate office in Ballantyne and hundreds at its South Boulevard plant.
The deal’s impact on local employment was not immediately clear.