Stepping into the New Year under a new umbrella company is Snyder’s-Lance Inc., a powerhouse in pretzels, sandwich crackers, kettle chips, deli snacks, and organic and natural tortilla chips. In an all-cash transaction worth $4.87 billion, Campbell Soup Company will acquire Snyder’s-Lance—with Campbell doling out the largest sum in its 148-year history, according to CNBC. The Board of Directors for both companies have already approved the acquisition, allowing Campbell to further expand its snack brand repertoire.
“The acquisition of Snyder’s-Lance will accelerate Campbell’s strategy and is in line with our Purpose, ‘real food that matters for life’s moments.’ It will provide our consumers with an even greater variety of better-for-you snacks. The combination of Snyder’s-Lance brands with Pepperidge Farm, Arnott’s and Kelsen will create a diversified snacking leader, drive sales growth and create value for shareholders. This acquisition will dramatically transform Campbell, shifting our center of gravity and further diversifying our portfolio into the faster-growing snacking category. We look forward to welcoming Snyder’s-Lance’s employees and their trusted family of leading brands to our company,” said Denise Morrison, Campbell’s President and Chief Executive Officer, in a recent press release for the company.
The new Campbell family member—whose portfolio includes Snyder’s of Hanover, Lance, Kettle Brand, KETTLE chips, Cape Cod, Snack Factory, Pretzel Crisps, Pop Secret, Emerald, and Late July—will join the likes of recently-acquired Pacific Foods. Headquartered in Charlotte, NC, Snyder’s-Lance has approximately 6,000 employees and operates 13 manufacturing centers throughout the U.S. and UK.
The cash deal for the newcomer offered an attractive $50 per share, representing a premium of about 27 percent of Snyder’s-Lance's closing stock on December 13th and the last trading day before media reported on the potential transaction between the two companies.
“Following a thorough review process of strategic options, we believe this transaction maximizes value for our shareholders through an immediate and certain cash premium. The transaction also unlocks the value of our portfolio, reflecting the progress we have made planning and executing our transformation. We are excited to join Campbell and to continue to provide great products to our consumers with an uncompromising focus on ingredients, quality and taste,” explained Brian J. Driscoll, President and Chief Executive Officer of Snyder’s-Lance in the same release.
This Charlotte, North Carolina-based company will reportedly skyrocket annual net sales for Campbell's snacking genre from 31 percent to 46 percent. Further, Campbell’s soup range represents about 27 percent of the company’s annual net sales. The acquisition is part of Campbell’s goals to grow its renowned snacking lines. Also, this transaction will grant Campbell’s with access to distribution channels like convenience and natural channels.
“Campbell’s expertise in brand-building, R&D, and supply chain and operations, coupled with Snyder’s-Lance’s well-known portfolio, distribution system and history of strong sales growth, will allow us to create a differentiated, branded snacking business with greater scale. The combined portfolio will be even more relevant to consumers who are increasingly seeking better-for-you snacks,” added Luca Mignini, President of Campbell's Global Biscuits and Snacks division.
With so much to offer Campbell, what is the snafu? Snyder's-Lance shareholders must approve of the transaction, as well regulatory measures and other closing conditions. But, the closing is, indeed, expected to occur during the first quarter of calendar 2018, with Campbell expecting the acquisition to be accretive to adjusted EPS in fiscal 2019, without integration costs and the costs to achieve synergies.
Want more details about the transaction? Check out the full press release here.
Snyder’s-Lance’s acquisition is Campbell’s sixth over the past five years. How will the inclusion of this established brand continue to strengthen sales for Campbell’s while allowing it to branch into new categories? Deli Market News will continue to keep you in-the-know with the latest developments!