CHARLOTTE, N.C., and SAN
FRANCISCO, Oct. 28, 2015
/PRNewswire/ -- Snyder's-Lance, Inc. (NASDAQ: LNCE)
("Snyder's-Lance" or "Company")
and Diamond Foods, Inc. (NASDAQ: DMND) ("Diamond Foods" or
"Diamond") today announced that they have entered into a definitive
agreement under which Snyder's-Lance will acquire all outstanding
shares of Diamond Foods in a cash and stock merger transaction for
approximately $1.91 billion,
including the assumption of approximately $640 million of indebtedness. Under the
terms of the agreement, 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, who
recommend that their respective stockholders approve the
transaction. Oaktree Capital (NYSE: OAK), Diamond's largest
stockholder, has agreed to vote in favor of the transaction.
Diamond Foods stockholders will own approximately 26% of the
combined company based on today's outstanding share counts.
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The strategic combination of Snyder's-Lance and Diamond Foods creates an
innovative, highly complementary and diversified portfolio of
branded products. Diamond Foods is a leading snack food
company with five brands including Kettle Brand® potato chips,
KETTLE® Chips, Pop Secret® popcorn, Emerald® snack nuts, and
Diamond of California® culinary nuts. Each Diamond Foods brand
brings unique strengths that fit with Snyder's-Lance's strategic plan while
increasing the company's annualized net revenue to approximately
$2.6 billion.
The transaction expands Snyder's-Lance's footprint in "better-for-you"
snacking and increases the Company's existing natural food channel
presence. Snyder's-Lance
expects that this transaction will expand and strengthen its Direct
Store Delivery ("DSD") network in the
United States, and provide Snyder's-Lance with a platform for growth in
the UK and across Europe.
Snyder's-Lance expects the
transaction to be immediately accretive to the Company's 2016
annualized earnings. The significant synergy potential includes an
estimated $75 million in annual cost
savings, of which approximately $10
million will be re-invested in the business to achieve the
combined company's growth plans. This excludes
transaction-related and integration costs. Synergies are
expected to come from increased scale of the combined company,
leveraging Snyder's-Lance existing
distribution system and cost reductions. In addition
Snyder's-Lance will gain the
benefit of tax net operating losses (NOL's) with a net present
value of $110 million dollars.
"Diamond Foods is a clear industry leader with exceptional
brands, and we're excited to bring together these two highly
complementary companies," said Carl E. Lee, Jr., President and
Chief Executive Officer of Snyder's-Lance. "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. 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.
We welcome the Diamond team to the Snyder's-Lance family
and look forward to winning together."
"The combination of Diamond and Snyder's-Lance provides the opportunity to
create significant value for our stockholders and offers immediate
benefits for consumers," said Brian J.
Driscoll, President and Chief Executive Officer 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."
Compelling Strategic Rationale
Snyder's-Lance believes the combined company
will have a significantly expanded portfolio and enhanced
capabilities, including:
- Broad Array of Iconic Snacking Brands - The new
Snyder's-Lance will offer an
enhanced portfolio of iconic brands including: Snyder's of Hanover®, Kettle Brand®, KETTLE®
Chips, Lance®, Pop Secret®, Cape Cod®, Snack Factory® Pretzel
Crisps®, Emerald® nuts, Late July® and Diamond of California® nuts,
among others
- International Expansion - Opportunities for
geographic expansion beginning with Diamond Foods UK presence with
future reach across Europe
- Expanded Better-For-You Presence – The
transaction will build upon Snyder's-Lance's current "better-for-you"
credentials with more brands and products, aligning to important
consumer trends with a diversified portfolio of non-GMO and organic
branded products
- Increased Scale – The combination is expected to
provide deeper retailer partnerships and a larger presence in
snacks, deli and center of store locations. Product distribution is
also expected to expand with opportunities in natural, convenience
store, food service and other channels
- Enhanced Operational Platform – The transaction
brings together two highly complementary businesses and scalable
infrastructure across distribution, manufacturing and
procurement
- Strengthened Capabilities – Strategic combination
creates ability to leverage the talents of two robust teams through
best practices and knowledge sharing
Additional Details
Completion of the transaction is
subject to approval by both Snyder's-Lance and Diamond stockholders.
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. After close of the
transaction, Brian J. Driscoll,
President and CEO of Diamond Foods, will join the board of
directors of Snyder's-
Lance.
Snyder's Lance expects to
continue to pay a dividend of $0.64
per share.
The transaction is expected to close in early 2016, subject to
stockholder and regulatory approvals and other customary closing
conditions.
Advisors
Morgan Stanley & Co LLC acted as
financial advisor to Snyder's-Lance. Deutsche Bank
Securities, Inc. was advisor to the board and provided a fairness
opinion to the Board of Directors of Snyder's-Lance. Snyder's-Lance intends to fund the transaction
through a combination of cash on hand, existing credit facilities,
and fully committed financing provided by BofA Merrill Lynch.
Troutman Sanders acted as legal
counsel to Snyder's-Lance.
Credit Suisse acted as financial advisor to Diamond.
Fenwick & West acted as legal counsel to Diamond.
Conference Call and Webcast
Snyder's-Lance will host a conference call to
discuss the transaction, scheduled to begin at 10:00am eastern
time on October 28, 2015. The conference call and
accompanying slide presentation will be webcast live through the
Investor Relations section of Snyder's-Lance website at
www.snyderslance.com. To participate in the conference call,
the dial-in number is (844) 830-1960 for U.S. callers or (315)
625-6883 for international callers. The conference ID is
69017426. A continuous telephone replay of the call will be
available between 2:00pm on
October 28, 2015 and midnight on
November 4, 2015. The replay
telephone number is (855) 859-2056 for U.S. callers or (404)
537-3406 for international callers. The replay access code is
69017426. Investors may also access a web-based replay of the
conference call at www.snyderslance.com.
About Snyder's-Lance,
Inc.
Snyder's-Lance, Inc.,
headquartered in Charlotte, NC,
manufactures and markets snack foods throughout the United States and internationally.
Snyder's-Lance's products include
pretzels, sandwich crackers, pretzel crackers, potato chips,
cookies, tortilla chips, restaurant style crackers, nuts and other
snacks. Snyder's-Lance has
manufacturing facilities in North
Carolina, Pennsylvania,
Indiana, Georgia, Arizona, Massachusetts, Florida, Ohio
and Wisconsin. Products are sold
under the Snyder's of Hanover®,
Lance®, Cape Cod®, Snack Factory® Pretzel Crisps®, Late July®,
Krunchers!®, Tom's®, Archway®, Jays®, Stella D'oro®, Eatsmart™,
O-Ke-Doke®, and other brand names along with a number of third
party brands. Products are distributed nationally through grocery
and mass merchandisers, convenience stores, club stores, food
service outlets and other channels. For more information, visit the
Company's corporate web site: www.snyderslance.com.
About Diamond Foods
Diamond Foods is a snack food and
culinary nut company focused on making innovative, convenient and
delicious snacks as well as culinary nuts true to our 100-year plus
heritage. Diamond sells its products under five different
widely-recognized brand names: Diamond of California®, Kettle
Brand® and KETTLE® Chips, Emerald® and Pop Secret®. Diamond's
mission is to honor nature's ingredients by making food that people
love. Diamond is proud of our offerings, many of which are non-GMO
Project verified and free of artificial flavors and preservatives,
and is committed to making great tasting products for our
consumers. Diamond's products are distributed in a wide range of
stores where snacks and culinary nuts are sold. For more
information, visit the Company's corporate web site:
http://www.diamondfoods.com.
Cautionary Information about Forward Looking
Statements
This news release contains statements which may
be forward looking within the meaning of applicable securities
laws. The statements include the expected completion of the
acquisition of Diamond Foods, Inc., the time frame in which the
acquisition will occur, and the expected benefits
to Snyder's-Lance from completing the acquisition. The
statements are subject to a number of risks and uncertainties.
Factors that could cause actual results to differ include, among
other things, the possibility that stockholder approval may not be
obtained or that regulatory approval of the proposed acquisition or
that other conditions to the closing of the merger may not be
satisfied, the potential impact on the business of Snyder's Lance or Diamond Foods due to the
announcement of the transaction, the occurrence of any event,
change or other circumstances that could give rise to the
termination of the definitive agreement, difficulties with the
successful integration and realization of the anticipated benefits
or synergies from the proposed acquisition, the ability
of Snyder's-Lance to achieve its strategic initiatives,
and general economic conditions. Therefore, actual results may
differ materially and adversely from those expressed in any
forward-looking statements. In addition, actual results are subject
to other risks and uncertainties that relate more broadly to
Snyder's-Lance or Diamond Foods'
overall business, including those more fully described in
Snyder's-Lance filings with the
SEC including its annual report on Form 10-K for the fiscal year
ended January 3, 2015, and its most
recent quarterly report filed on Form 10-Q for the quarter year
ended July 4, 2015, and those more
fully described in Diamond Foods' filings with the SEC, including
its annual report on Form 10-K for the fiscal year ended
July 31, 2015. Except as required by
law, neither Snyder's-Lance nor Diamond Foods
undertakes any obligation to update or revise publicly any
forward-looking statement as a result of new information, future
developments or otherwise.
This news release also includes projections regarding future
revenues, earnings and other results which are based
upon Snyder's-Lance's current expectations and
assumptions, which are subject to a number of risks and
uncertainties. Factors that could cause actual results to
differ include general economic conditions; volatility in the price
or availability of inputs, including raw materials, packaging,
energy and labor; price competition and industry consolidation;
changes in our top retail customer relationships; failure to
successfully integrate acquisitions; loss of key personnel; failure
to execute and accomplish our strategy; concerns with the safety
and quality of certain food products or ingredients; adulterated,
misbranded or mislabeled products or product recalls; disruption of
our supply chain or information technology systems; improper use of
social media; changes in consumer preferences and tastes or
inability to innovate or market our products effectively; reliance
on distribution through a significant number of independent
business owners; protection of our trademarks and other
intellectual property rights; impairment in the carrying value of
goodwill or other intangible assets; new regulations or
legislation; interest and foreign currency exchange rate volatility
and the interests of a few individuals who control a significant
portion of our outstanding shares of common stock may conflict with
those of other stockholders, which have been discussed in greater
detail in the most recent Form 10-K and other reports filed by
Snyder's Lance with
the Securities and Exchange Commission.
Additional Information and Where to Find it
In
connection with the proposed transaction between Diamond Foods,
Inc. ("Diamond Foods") and Snyder's-Lance, Inc. ("Snyder's-Lance"), Diamond Foods and
Snyder's-Lance intend to file a
joint proxy statement/prospectus and relevant materials concerning
the proposed transaction with the SEC relating to the solicitation
of proxies to vote at respective special meeting of stockholders of
Diamond Foods and Snyder's-Lance
to be called to approve the proposed transaction. The definitive
proxy statement will be mailed to the stockholders of the Company
in advance of the special meeting. STOCKHOLDERS OF Diamond Foods
and SNYDER'S-LANCE ARE URGED TO
READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING the
DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain the documents
free of charge at the SEC's web site, http://www.sec.gov. Documents
will also be available for free from Diamond Foods at
www.diamondfoods.com and from Snyder's-Lance's at www.snyderslance.com.
Diamond Foods, Snyder's-Lance
and their respective directors and executive officers may be deemed
to be participants in the solicitation of proxies with respect of
the proposed transaction. Information about the directors and
executive officers of Diamond Foods, including their respective
interest in security holding of Diamond Foods, is set forth in the
proxy statement for Diamond Foods' 2015 Annual Meeting of
Stockholders, which was filed with the SEC on November 26, 2014. Information about the
directors and executive officers of Snyder's-Lance is set forth in the proxy
statement for Snyder's-Lance's
2015 Annual Meeting of Stockholders, which was filed with the SEC
on April 1, 2015 and its Current
Report on Form 8-K filed with the SEC on October 1, 2015. Investors may obtain additional
information regarding the interest of such participants by reading
the definitive joint proxy statement/prospectus regarding the
transaction when it becomes available. These documents can be
obtained free of charge from the sources indicated above.
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SOURCE Snyder's-Lance, Inc.