November 29, 2016

Following Snyder-Lance’s acquisition of Diamond Foods in February of this year, the company has decided to spin off the Diamond of California nut brand to Blue Road Capital and retain Diamond’s snack brands as it pursues its strategic plan of growth within the better-for-you snack space.

Under the terms of the deal, Blue Road Capital has agreed to acquire the Diamond of California nut brand that produces walnuts, almonds, cashews, and pistachios for an undisclosed sum. The Diamond of California business posted net revenues of $42.9 million for the third quarter of this fiscal year.

“As with most acquisitions, we picked up a business that, while attractive, was not completely aligned with our core business,” said Carl Lee, President and Chief Executive Officer of Snyder’s-Lance.

Snyder’s-Lance will be retaining Diamond’s snack brands that include Pop Secret Popcorn and Kettle brand potato chips.

“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,” noted Mr. Lee.

Blue Road

Blue Road Capital is an agricultural-focused private equity investment fund that targets the acquisition of ‘control positions’ in businesses within the agricultural supply chain in the Americas. The firm then partners with management teams to develop added value that goes beyond the intrinsic value of the asset.

Founding Partner, Duryea, was among the featured speakers at the Global AgInvesting conference in New York in 2015. There, Duryea described the firm’s approach, which involves investing directly in assets as opposed to participating in auctions. Secondary commodities with a natural hedge to water, such as pecans, are an area of focus. Blue Road is most interested in the supply chain, which Duryea described as “midstream agriculture between production and consumption” – a niche that Diamond of California neatly fits.

“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,” said Carl E. Lee, Jr.

This past summer, Blue Road announced its final close on the largest first-tine agriculture fund with an exclusive focus on production and supply chains in the Americas at $433 million. Blue Road Capital’s Blue Road Capital L.P. was able to secure not only capital for this fund but commitments for future co-investments in platform companies from a diverse group of Limited Partners, including university endowments, pension funds, family offices and real assets investment advisors. With First Point Equity serving as the sole global placement agent, total capital commitments should meet or exceed Blue Road Capital’s original target for the fund.

Leverage

For Snyder-Lance, this divestiture, which is expected to close by the end of 2016, will help the company accelerate its plan to reduce leverage to below 4.0X by the end of this year and to 3.0X by the end of next year. It will also gain the company a level of flexibility in its balance sheet that will better position the company to capitalize upon future opportunities reports Street Insider.

“This is truly a beneficial transaction for both parties and will be a positive for our employees in Stockton, California,” said Mr. Lee. “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.”

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Lynda Kiernan