Snyder's-Lance Inc., announced Wednesday that it agreed to buy fellow snack company Diamond Foods Inc., in a cash-and-stock deal valued at roughly $1.27 billion, adding to its repertoire of healthy snacks.
Snyder's, owner of Snyder's of Hanover and Cape Cod, said the acquisition of the maker of Kettle Brand chips, Emerald nuts and Pop Secret popcorn enhances its existing natural-food presence as well as its direct store delivery network in the U.S., according to The Wall Street Journal.
Synder's also said the purchase is expected to help the company internationally.
"We will have an opportunity to grow internationally with Diamond's existing European platform, bringing unique products to consumers in that market," said Snyder's Chief Executive Carl Lee.
Shareholders of San Francisco-based Diamond Foods will receive 0.775 of a Snyder's-Lance share and $12.50 in cash for each of their own shares, reported Bloomberg. The transaction also includes about $640 million in debt. Diamond Foods stockholders will own about 26 percent of the combined company once the transaction is complete.
The deal comes as traditional food companies scramble to meet the demands of consumers who are concerned about eating healthier, more natural foods. Earlier this year, food giant Heinz purchased 51 percent of Kraft in a merger deal worth roughly $49 billion.
Charlotte-based Snyder's believes the Diamond deal will add to its 2016 annualized earnings, and that it will lead to roughly $75 million in annual cost savings, according to The Associated Press.
Both companies' boards have approved the deal, but are still waiting for approval from shareholders of both companies. Once the transaction is complete, Diamond Foods President and CEO Brian Driscoll will join the Snyder's-Lance board.
Diamond Foods shares climbed 6.2 percent to $37.05 in morning trading Wednesday, while Snyder's-Lance shares dropped 9.2 percent to $32.75.
