Snyder's-Lance (LNCE) to Sell Diamond of California to Blue Road Capital

November 28, 2016 4:32 PM EST

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(Updated - November 28, 2016 4:34 PM EST)

Snyder’s-Lance, Inc. (NASDAQ: LNCE) announced today that the Company has signed a definitive agreement to sell its Diamond of California® culinary nut business to Blue Road Capital. The sale of Diamond of California® aligns with the Company’s strategy to focus more resources on the growth opportunities for its core brands. The transaction reflects the Company’s commitment to improving capital efficiency and is anticipated to be accretive to both returns on invested capital and operating margins. In agreement with the buyer, specific terms of the transaction have not been disclosed. The Company expects the transaction to close around year-end 2016.

“This strategic transaction will allow us to concentrate on our core business of providing our consumers and retail partners with our premium portfolio of snack brands focused on better ingredients, quality and taste,” said Carl E. Lee, Jr., President and Chief Executive Officer at Snyder’s-Lance. “Diamond of California® is a leader in culinary nuts with a bright future, and should benefit from Blue Road Capital’s expertise, strategic assets and prior investments in the category. This is truly a beneficial transaction for both parties and will be a positive for our employees in Stockton, CA. I’d like to thank the team for their hard work and dedication that helped to build the Diamond of California® brand, and we wish them continued success.”

Snyder’s-Lance entered the culinary nuts business as a result of the Company’s acquisition of Diamond Foods, Inc. in February 2016. The Diamond of California® nut business is operated from the Company’s Stockton, CA facility, and net revenue in the third quarter of 2016 was $42.9 million.

The Company is tracking ahead of its stated goals to reduce leverage to less than 4.0x by the end of 2016 and 3.0x by the close of 2017. The sale of Diamond of California® will expedite the Company’s plans to reduce leverage. In addition, this transaction provides incremental balance sheet flexibility to execute on the Company’s strategic priorities as opportunities arise.

Given the anticipated timing of the transaction, the divestiture of Diamond of California® is not expected to materially impact the Company’s full-year 2016 outlook(1). As such, the Company is reaffirming its previously stated full-year 2016 outlook for net revenue, earnings per share excluding special items(2), and adjusted EBITDA(2). The Company believes this transaction could have a material impact on its GAAP financial statements.

Wells Fargo Securities, LLC acted as exclusive financial advisor and Troutman Sanders LLP acted as legal counsel to Snyder’s-Lance in connection with this transaction.

(1) Full-year 2016 GAAP guidance are not provided in this release due to the likely occurrence of one or more of the following items where the Company is unable to reliably forecast the timing and magnitude: Continued transaction and integration related costs associated with the acquisition of Diamond Foods, other potential transactions and their related costs, settlements of contingent liabilities, possible gains or losses on the sale of businesses or other assets, restructuring costs, impairment charges, and the income tax effects of these.(2) Descriptions of measures excluding special items are provided in “Use and Definition of Non-GAAP Measures”.

Conference Call and WebcastManagement will host a conference call today, Monday November 28, 2016, at 5:00 p.m. ET, to discuss the Diamond of California® transaction. The conference call will be webcast live through the Investor Relations section of the Snyder's-Lance website at www.snyderslance.com. To participate in the conference call, the dial-in number is (844) 830-1960 for U.S. callers or (315) 625-6883 for international callers. The conference ID is 28317249. A continuous telephone replay of the call will be available until December 4. The replay telephone number is (855) 859-2056 for U.S. callers or (404) 537-3406 for international callers. The replay access code is 28317249. Investors may also access a web-based replay of the conference call at www.snyderslance.com.



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