Campbell Soup To Buy Snyder's-Lance For $50 Per Share In All-cash Deal

(RTTNews) - Campbell Soup Co. (CPB) has agreed to acquire Snyder's-Lance Inc. (LNCE) for $50.00 per share in an all-cash transaction, the two companies said Monday. The acquisition, which has been approved by the boards of directors of both companies, will enable Campbell to expand its portfolio of snacking brands in the $89 billion U.S. snacking market.

Charlotte, North Carolina-based Snyder's-Lance is a snacking company whose portfolio includes brands such as Snyder's of Hanover, Lance, Kettle Brand, KETTLE chips, Cape Cod, Snack Factory Pretzel Crisps, Pop Secret, Emerald and Late July.

The purchase price represents a nearly 27 percent premium to Snyder's-Lance's closing stock price on December 13, 2017, the last trading day prior to media reports regarding a potential transaction. Closing of the transaction is expected by early second quarter of calendar 2018.

Snyder's-Lance reported $2.2 billion in net sales for the trailing 12 months ended September 30, 2017. From calendar 2012-2016, Snyder's-Lance net sales grew at an 11.5 percent CAGR; organic net sales outpaced category growth with a 4 percent CAGR.

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.

Campbell said it plans to finance the acquisition through $6.2 billion of debt comprising a combination of long-term and short-term debt. The company added it will suspend share repurchases to maximize free cash flow for the purposes of paying down debt. Campbell expects to maintain its current dividend policy.

Campbell expects the acquisition to be accretive to its earnings per share in fiscal 2019. The company also expects approximately $170 million in cost synergies by end of fiscal 2022 and additionally, expects to achieve a majority of Snyder's-Lance's existing cost transformation program.