Despite earlier reports that Kellogg Co. was on the verge of buying Diamond Foods Inc., Snyder's-Lance Inc. came through with a definitive agreement to buy the troubled walnut and snack company in a cash and stock merger transaction for approximately $1.91 billion, it was announced Oct. 28.
The deal includes the assumption of a hefty $640 million of debt. Diamond stockholders will receive 0.775 Snyder's-Lance shares and $12.50 in cash per Diamond Foods share upon closing of the transaction.
The agreement has been approved by the boards of directors of both companies, as well as by Oaktree Capital, Diamond's largest stockholder. Diamond Foods stockholders will own approximately 26 percent of the combined company.
"The strategic combination of Snyder's-Lance and Diamond Foods creates an innovative, highly complementary and diversified portfolio of branded products," said a Snyder's-Lance announcement. "Diamond Foods is a leading snack food company with five brands including Kettle Brand chips, Pop Secret popcorn, Emerald snack nuts, and Diamond of California culinary nuts."
And Snyder's-Lance owns Snyder's of Hanover pretzels, Lance snack crackers, Cape Cod potato chips and Snack Factory Pretzel Crisps. Snyder's-Lance itself is the result of a 2010 merger.
Company officials said the buy should increase annual sales to approximately $2.6 billion. Snyder's-Lance sales were $1.6 billion in 2014 and Diamond's were $865 million.
"The transaction expands Snyder's-Lance's footprint in 'better-for-you' snacking and increases the company's existing natural food channel presence," said the company statement. "Snyder's-Lance expects this transaction will expand and strengthen its direct store delivery network in the U.S. and provide Snyder's-Lance with a platform for growth in the UK and across Europe."
Brian Driscoll, who became Diamond's pres./CEO when Michael Mendes resigned in 2012 amidst an accounting scandal, will join the board of directors of Snyder's-Lance. Earlier this month, Driscoll hinted the company wanted to be acquired or sold off in pieces. The transaction is expected to close in early 2016.