Campbell Soup strikes deal to acquire Snyder's Lance

20 Dec 2017

Campbell Soup and Snyder’s-Lance have announced that the companies have entered into an agreement for Campbell to acquire Snyder’s-Lance for $50.00 per share in an all-cash transaction.

Campbell Soup strikes deal to acquire Snyder's Lance

Campbell Soup and Snyder’s-Lance have announced that the companies have entered into an agreement for Campbell to acquire Snyder’s-Lance for $50.00 per share in an all-cash transaction. The purchase price represents a premium of approximately 27% to Snyder’s-Lance’s closing stock price on Dec. 13, 2017, the last trading day prior to media reports regarding a potential transaction. The acquisition, which has been approved by the Boards of Directors of both companies, will enable Campbell to expand its portfolio of snacking brands.

Snyder’s-Lance, 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, popcorn, nuts and other snacks. Products are sold under the Snyder’s of Hanover, Lance, Kettle Brand, KETTLE Chips, Cape Cod, Snack Factory Pretzel Crisps, Pop Secret, Emerald, Late July, Krunchers! ,Tom’s, Archway, Jays, Stella D’oro, Eatsmart Snacks, O-Ke-Doke, Metcalfe’s skinny, 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.

The U.S. snacking market is said to be worth $89 billion, and has seen a CAGR of 3%. Snyder’s-Lance reported $2.2 billion in net sales for the trailing 12 months ended Sept. 30, 2017. From calendar 2012-2016, Snyder’s-Lance net sales grew at an 11.5% CAGR; organic net sales outpaced category growth with a 4% CAGR. The company has approximately 6,000 employees and operates 13 manufacturing centres throughout the United States and United Kingdom.

The acquisition of Snyder’s-Lance will, Campbell said, accelerate its access to faster-growing distribution channels including the convenience and atural channels.

Denise Morrison, Campbell’s President and Chief Executive Officer, said, “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.”

Campbell’s baked snacks product portfolio generated approximately $2.5 billion in net sales in fiscal 2017. With the addition of Snyder’s-Lance’s complementary portfolio, snacking would represent approximately 46% of Campbell’s annual net sales (previously 31%) on a pro forma basis. Campbell’s soup portfolio, including the recent acquisition of Pacific Foods, would represent approximately 27% of the company’s annual net sales.

Brian J. Driscoll, President and Chief Executive Officer of Snyder’s-Lance, said, “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.”

Snyder’s-Lance will become part of Campbell’s Global Biscuits and Snacks division, which includes the company’s Pepperidge Farm, Arnott’s and Kelsen businesses, and the simple meals and shelf-stable beverages business in Australia, Asia Pacific and Latin America. The division is led by Luca Mignini, President. The division will combine Snyder’s-Lance’s portfolio with Campbell’s snacking brands including Goldfish crackers, Tim Tam biscuits, Milano cookies and Kjeldsens butter cookies.

Mignini said, “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.”

This is Campbell’s sixth acquisition in five years. The company acquired Bolthouse Farms in August 2012, organic baby food company Plum in June 2013, biscuit company Kelsen in August 2013, fresh salsa and hummus maker Garden Fresh Gourmet in June 2015, and organic broth and soup producer Pacific Foods in December 2017.