Lance Inc., and Snyder’s of Hanover Inc., have signed a definitive agreement to combine in a stock-for-stock merger that will create a $1.6 billion combined company named Snyder’s-Lance Inc. . The merger is expected to close following shareholder meetings for both Lance and Snyder’s in fall 2010.
Snyder’s had announced plans to acquire Utz Quality Foods last October, saying the combined $1.1 billion firm would be better able to compete than either company could alone. But Utz backed out two weeks later, after realizing that getting Federal Trade Commission approval would be a “protracted” process.”
Snyder’s and Lance said the merger of equals would lead to annual savings of $30 million, but they did not specify the deal’s impact on the companies’ work forces.
In June, Lance announced a two percent reduction in its 4,800-employee work force to restore its profit margins.
Under the terms of the transaction, Snyder’s and Lance shareholders each will own approximately 50 percent of the new company after the merger. Existing Lance and Snyder’s options will become options in the combined Snyder’s-Lance. Contingent on the closing of the transaction, existing Lance shareholders will receive a one-time $3.75 special cash dividend.
Lance’s headquarters in Charlotte, NC will be the headquarters for the combined firm. Snyder’s headquarters in Hanover will be an “additional headquarters,” the companies said.
“This transaction allows us to create a stronger company in a highly competitive industry and simultaneously create value for our shareholders. Snyder’s-Lance will have a broad array of leading snack food products supported by a strong national direct store delivery system,” said David V. Singer, president and CEO of Lance. “We are extremely pleased with the opportunity to combine two leading snack food companies in such a strategically compelling merger. Combining our strengths in salty, cracker and cookie snacks creates the opportunity to be a focused specialty company with the scale to compete in high volume categories,” said Carl E. Lee Jr., president and CEO of Snyder’s.
Michael A. Warehime, current Snyder’s chairman, will serve as chairman of the board of the combined company, and W. J. Prezzano, current Lance chairman, will serve as lead independent director. Singer, current Lance president and CEO, will become CEO of Snyder’s-Lance. Lee, current Snyder’s president and CEO, will become president and COO.,Rick D. Puckett, current Lance executive vice president and CFO, will become executive vice president and CFO of the combined company.
The combined company will have a well-established portfolio of snack food brands that includes Snyder’s of Hanover, Lance, Cape Cod, Grande, Tom’s, Jays, O-Ke-Doke, Stella D’oro, Krunchers!, Archway, Naturals as well as Lance Private Brands, a leader in private label cookies and crackers. Products will include pretzels, sandwich crackers, potato chips, cookies, tortilla chips and nuts.
Snyder’s, founded in 1909, has 2,250 employees and annual sales of $750 million, according to newspaper files. Lance, founded in 1913, had 2009 sales of $918 million.