Campbell’s buying snack maker Snyder’s-Lance for $4.87B

Campbell Soup Co. is set to buy snacking company Snyder’s-Lance in an all-cash deal.

The $50 per share purchase price represents a premium of about 27 percent to Snyder’s-Lance’s closing stock price Dec. 13, the last trading day prior to media reports regarding a potential transaction. Reports put the deal’s value at approximately $4.87 billion.

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.

Campbell’s purchase of the brand that puts out such snacks as Pop Secret, Snyder’s of Hanover and KETTLE chips is expected to grow the Camden-based food company in the $89 billion national snacking market.

Snyder’s-Lance reported $2.2 billion in net sales for the 12 months that ended Sept. 30. Its net sales grew at an 11.5 percent compound annual growth rate from 2012 to 2016.

The acquisition, which has been approved by the boards of directors of both companies, will enable Campbell to expand its portfolio of leading snacking brands.

“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,’” said Campbell’s CEO and President Denise Morrison. “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 percent of Campbell’s annual net sales, up from 31 percent.

“Following a thorough review process of strategic options, we believe this transaction maximizes value for our shareholders through an immediate and certain cash premium,” said Snyder’s-Lance CEO and President Brian J. Driscoll. “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.”

The division combining Snyder’s-Lance with Campbell’s snacking brands is led by President Luca Mignini.

“Campbell’s expertise in brand-building, (research and development) 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,” Mignini said. “The combined portfolio will be even more relevant to consumers who are increasingly seeking better-for-you snacks.”

Headquartered in Charlotte, North Carolina, Snyder’s-Lance has about 6,000 employees and operates 13 manufacturing centers throughout the United States and United Kingdom.

Campbell plans to finance the acquisition through $6.2 billion of debt comprising a combination of long-term and short-term debt.

The closing of the transaction is subject to the approval of Snyder’s-Lance shareholders, as well as customary regulatory approvals and other closing conditions. Closing is expected by early second quarter of 2018.

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 earlier this month.