Campbell's Expanding Snack Category With Snyder's-Lance Deal

CAMDEN, N.J. & CHARLOTTE, N.C. — Campbell Soup Co. will buy pretzels and Cape Cod chips maker Snyder's Lance Inc. for $4.87 billion as it looks to expand its snack business amid sopping soup sales.

Snyder's-Lance will become part of Campbell's Global Biscuits and Snacks division, which includes the 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, lead by president Luca Mignini, will combine Snyder's-Lance's portfolio with Campbell's snacking brands including Goldfish crackers, Tim Tam biscuits, Milano cookies and Kjeldsens butter cookies.

"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."

According to Campbell's President and CEO Denise Morrison, the acquisition of Snyder's-Lance will accelerate Campbell's strategy and is in line with the company's purpose, "real food that matters for life's moments," and will provide 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," she said. "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."

The companies have agreed that Campbell will acquire Snyder's-Lance for $50 per share in an all-cash transaction. The company plans to finance the acquisition through $6.2 billion of debt comprising a combination of long-term and short-term debt.

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 — previously 31 percent — on a pro forma basis, according to the company.

Campbell's soup portfolio, including the recent acquisition of Pacific Foods, would represent approximately 27 percent of annual net sales.

"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," said Brian J. Driscoll, president and CEO of Snyder’'s-Lance. "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."

Although both companies' board of directors approved the acquisition, 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.

Certain members of the Warehime family, who collectively own 13.2 percent of Snyder's-Lance's outstanding common stock, have agreed to vote their shares in support of the transaction. Closing is expected by early second quarter of 2018.

Campbell expects the acquisition to be accretive to adjusted earnings per share in fiscal 2019, excluding integration costs and costs to achieve synergies.

Credit Suisse acted as lead financial adviser to Campbell in this transaction. Rothschild also acted as a financial adviser to Campbell. Weil, Gotshal & Manges LLP acted as Campbell's legal counsel.

Goldman Sachs & Co. LLC acted as lead financial adviser to Snyder's-Lance. Deutsche Bank has also acted as long-time financial adviser to Snyder's-Lance. Jenner & Block LLP acted as legal counsel to the company.

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 this month.

Founded in 1868, Campbell's portfolio is lead by its soup brand, in addition to Pepperidge Farm, Bolthouse Farms, V8, Swanson, Prego and more. The company is based in Camden.

Headquartered in Charlotte, Snyder's-Lance manufactures and markets snack foods throughout the United States and internationally. The company'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 brands and more.