SAN FRANCISCO — Diamond Foods has entered into an agreement with the Procter & Gamble Co. to acquire the Pringles brand for approximately $2.3 billion. The acquisition will triple the size of Diamond Foods’ snack business, according to the company.
“Pringles is an iconic, billion dollar snack brand with significant global manufacturing and supply chain infrastructure,” said Michael J. Mendes, chairman, president and chief executive officer of Diamond Foods. “Our plan is to build upon the brand equity Pringles has established in over 140 countries. This strategic combination will create an independent, global leader in the snack industry with a focus on quality and innovative products. Not only is this combination immediately accretive, it also creates a platform that we believe will allow us to build shareholder value for years to come.”
The addition of the Pringles brand expands Diamond Foods’ product portfolio, which also includes the Diamond of California, Emerald nuts, Pop Secret popcorn and the Kettle brand of potato chips.
Diamond Foods said the acquisition gives the company many advantages, including expanding its distribution infrastructure, gaining a broader global manufacturing and supply chain base in Asia, Latin America and Central Europe, and increasing Diamond’s geographic range, with international sales now accounting for 49% of total revenues on a pro forma basis.
For fiscal year 2012, Diamond Foods anticipates growth in its core business with earnings per share of $2.85 to $2.98 per share on a standalone basis, an increase of 15% to 20% from the midpoint of its fiscal 2011 guidance range, which represents a 30% increase over 2010 e.p.s.
“We are confident Diamond Foods will be an excellent new home for our Snacks employees,” said Bob McDonald, chairman of the board, president and c.e.o. of Procter & Gamble. “This is also a terrific deal for our shareholders — maximizing value and minimizing earnings per share dilution.”