Supplier News Breaks
Lance, Snyder's of Hanover set to merge
July 22nd, 2010
CHARLOTTE, N.C. and HANOVER, Pa. – Snack makers Lance Inc. and Snyder's of Hanover Inc. have entered a merger agreement to create a combined company that will be called Snyder's-Lance Inc.
Lance and Snyder's said Thursday that the deal, a stock-for-stock merger of equals, will result in a stronger national snack food company with a broad product portfolio that includes iconic pretzel, sandwich cracker and potato chip brands.
The merger unites Snyder's, a global leader in pretzels and a U.S. leader in specialty snacks that traces its roots to 1909, with Lance, a U.S. snack food leader in sandwich crackers, potato chips, and cookies founded in 1913.
According to Lance and Snyder's, the combined company will have the operating scale and balance sheet strength to provide more value to consumers, customers and shareholders. In addition to leading brands such as Lance, Snyder's of Hanover, Cape Cod and Grande, Snyder's-Lance will have a national distribution footprint with one of the largest direct-store delivery (DSD) networks in the United States.
"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 DSD system," David Singer, president and chief executive officer of Charlotte, N.C.-based Lance, said in a statement.
Snyder's-Lance will have pro forma combined net sales of about $1.6 billion, and the combination is expected to generate more than $30 million in annualized synergies.
"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," commented Carl Lee Jr., president and CEO of Snyder's.
Under the transaction terms, shareholders in Snyder's and Lance will each own approximately 50% of the new company after the merger. And contingent on the closing of the transaction, current Lance shareholders will receive a one-time $3.75 special cash dividend. The principal shareholders of Snyder's have agreed to vote in favor of the merger, and the boards of both companies have unanimously recommended the approval of the transactions to their shareholders.
The proposed merger is expected to close, pending regulatory approvals, after shareholder meetings for Lance and Snyder's this fall.
Plans call for Snyder's chairman Michael Warehime to serve as chairman of the combined company, and W. J. Prezzano, current Lance Chairman, to be lead independent director. Current Lance CEO Singer is slated to become chief executive of Snyder's-Lance, while current Snyder's CEO Lee is due to become president and chief operating officer of the merged company. Rick Puckett, Lance's current chief financial officer, will become CFO of Snyder's-Lance.
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