Last week Snyder’s-Lance, Inc.announced that the Company had signed a definitive agreement to sell its Diamond of California® culinary nut business to Blue Road Capital.
The sale of Diamond of California® aligns with the Company’s strategy to focus more resources on the growth opportunities for its core brands.
The transaction reflects the Company’s commitment to improving capital efficiency and is anticipated to be accretive to both returns on invested capital and operating margins. In agreement with the buyer, specific terms of the transaction have not been disclosed.
The Company expects the transaction to close around year-end 2016.
Carl E. Lee, Jr., President and Chief Executive Officer at Snyder’s-Lance:
“This strategic transaction will allow us to concentrate on our core business of providing our consumers and retail partners with our premium portfolio of snack brands focused on better ingredients, quality and taste.”
“Diamond of California® is a leader in culinary nuts with a bright future, and should benefit from Blue Road Capital’s expertise, strategic assets and prior investments in the category.”
“This is truly a beneficial transaction for both parties and will be a positive for our employees in Stockton, California.”
“I’d like to thank the team for their hard work and dedication that helped to build the Diamond of California® brand, and we wish them continued success.”
Snyder’s-Lance entered the culinary nuts business as a result of the Company’s acquisition of Diamond Foods, Inc. in February 2016. The Diamond of California® nut business is operated from the Company’s Stockton, CA facility, and net revenue in the third quarter of 2016 was $42.9 million.
The Company is tracking ahead of its stated goals to reduce leverage to less than 4.0x by the end of 2016 and 3.0x by the close of 2017.
The sale of Diamond of California® will expedite the Company’s plans to reduce leverage. In addition, this transaction provides incremental balance sheet flexibility to execute on the Company’s strategic priorities as opportunities arise.