Daily News: December 19, 2017

Credit Suisse Supports Campbell’s Acquisition of Snyder’s-Lance

Campbell Soup acquired Snyder’s-Lance for $50 per share in an all-cash transaction

The purchase price represents a premium of approximately 27% to Snyder’s-Lance’s closing stock price on December 13, 2017, the last trading day prior to media reports regarding a potential transaction. The acquisition, which has been approved by the boards of directors of both companies, will enable Campbell to expand its portfolio of leading snacking brands.

According to a related 8-K filing, Campbell entered into a bridge commitment letter with Credit Suisse Securities (USA) and Credit Suisse to arrange a 364-day senior bridge term loan credit facility in an aggregate principle amount of up to $6.2 billion.

Snyder’s-Lance manufactures and markets snack food throughout the U.S. The company’s portfolio includes brands such as Snyder’s of Hanover, Lance, Kettle Brand, KETTLE chips, Cape Cod, Snack Factory Pretzel Crisps, Pop Secret, Emerald and Late July.

The acquisition of Snyder’s-Lance will accelerate Campbell’s access to faster-growing distribution channels including the convenience and natural channels.

Denise Morrison, Campbell’s president and CEO, said, “The acquisition of Snyder’s-Lance will accelerate Campbell’s strategy and is in line with our purpose, ‘real food that matters for life’s moments.’ It will provide our consumers with an even greater variety of better-for-you snacks. The combination of Snyder’s-Lance brands with Pepperidge Farm, Arnott’s and Kelsen will create a diversified snacking leader, drive sales growth and create value for shareholders. This acquisition will dramatically transform Campbell, shifting our center of gravity and further diversifying our portfolio into the faster-growing snacking category.”

Campbell plans to finance the acquisition through $6.2 billion of debt comprising a combination of long-term and short-term debt. Pro forma leverage is expected to be 4.8x at closing, and the company is committed to deleveraging to approximately 3x by fiscal 2022. Campbell will suspend share repurchases to maximize free cash flow for the purposes of paying down debt.

Credit Suisse acted as lead financial adviser to Campbell in this transaction. Rothschild also acted as a financial adviser to Campbell. Weil, Gotshal & Manges acted as Campbell’s legal counsel. Goldman Sachs acted as lead financial adviser to Snyder’s-Lance. Deutsche Bank has also acted as long-time financial adviser to Snyder’s-Lance. Jenner & Block acted as legal counsel to Snyder’s-Lance.