Lance and Snyder's of Hanover to combine
July 22, 2010
CHARLOTTE, N.C. — Snack food leaders Lance, Inc. and Snyder’s of Hanover, Inc. have entered an agreement to create a combined company called Snyder’s-Lance, Inc. that will have a national distribution footprint, one of the largest Direct-Store Delivery networks in the United States, and more than $1.5 billion in annual sales.
The combined company is expected to have pro forma combined net sales of approximately $1.6 billion, adjusted EBITDA of about $170 million and generate more than $30 million in annualized synergies.
Lance, which is a publicly-traded company, reported 2009 sales of $918 million (equating to 57% of the combined company’s projected annual sales) and EBITDA of $94.8 million (equal to 56%). The combined company would still be significantly smaller than Frito-Lay North America, which generates sales of $3.2 billion every quarter.
Shareholders in Snyder’s and Lance each will own about 50% of the new company after the merger, and existing Lance and Snyder’s options will become options in the combined Snyder’s-Lance. In addition, existing Lance shareholders will receive a one-time $3.75 special cash dividend.
The merger is expected to close in the fall after shareholder meetings for both Lance and Snyder’s.
“This transaction allows us to create a stronger company in a highly competitive industry and simultaneously create value for our shareholders,” said David V. Singer, president and chief executive officer of Lance. “Snyder’s-Lance will have a broad array of leading snack food products supported by a strong national D.S.D. system.”
Founded in 1913, Lance, Inc. manufactures and markets snack foods throughout much of the United States and other parts of North America. The company’s products include sandwich crackers and cookies, potato chips, crackers, cookies, other snacks, sugar wafers, nuts, restaurant style crackers and candy. Lance has manufacturing facilities in North Carolina, Iowa, Georgia, Massachusetts, Texas, Florida, Ohio, and Ontario, Canada. Products are sold under the Lance, Cape Cod, Tom’s, Archway and Stella D’oro brand names along with a number of private label and third-party brands.
The company’s products are distributed through a direct-store-delivery system of approximately 1,300 sales routes, a network of independent distributors and direct shipments to customer locations. Products are distributed widely through grocery and mass merchant stores, convenience stores, club stores, food service outlets and other channels.
Carl E. Lee Jr., president and c.e.o. of Snyder’s, said combining the companies’ 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.”
Snyder’s of Hanover, which traces its roots to 1909, is a bakery and snack food distribution company based specializing in pretzels. Snyder’s of Hanover is the No. 1 pretzel company in the United States, and also the global leader in pretzel sales with an extensive line of traditional pretzels, pretzel pieces, pretzel sandwiches, coated pretzels and multi-grain pretzels. Its products are sold throughout the United States, Canada, Europe, Asia, and in the Middle East. Snyder’s has three snack food plants, located in Goodyear, Ariz.; Hanover, Pa.; and Chicago.
Once the merger is complete, Michael A. Warehime, current chairman of Snyder’s, will become chairman of the combined company, and W. J. Prezzano, chairman of Lance, will become lead independent director. Mr. Singer will become c.e.o. of Snyder’s-Lance and Mr. Lee Jr. will become president and chief operating officer. Rick D. Puckett, current executive vice-president and chief financial officer of Lance, will become executive vice-president and c.f.o. of Snyder’s-Lance.
The combined company’s corporate headquarters will be located in Charlotte with additional headquarters in Hanover.