Snyder’s-Lance completes sale of Private Brands business

US-based snack maker Snyder’s-Lance has completed the sale of its Private Brands business and two manufacturing facilities in the US and Canada to private label snacks producer Shearer’s Foods for $430m.

The deal, which was announced in May 2014, is in line with Snyder’s-Lance’s plan to focus on its branded products by placing more resources on growth categories such as ‘better for you’, nutritional and premium snacks.

In order to strengthen these growth platforms, the company plans to leverage its incremental product development, innovation, marketing and one of the largest direct store delivery (DSD) networks in the US.

Last month, Snyder’s-Lance completed the acquisition of Baptista’s Bakery, which produces baked snack foods and ‘better for you’ snacks.

Snyder’s-Lance noted that the acquisition of Baptista’s Bakery together with the sale of its Private Brands business will result in annualised reduction in net revenue of approximately $250m.

Snyder’s-Lance president and CEO Carl Lee Jr said: "This is an important step forward for Snyder’s-Lance as we dedicate our attention to our branded portfolio."

According to the company, these transactions will help it to become a differentiated branded company focused on consumer trends and demand.

Snyder’s-Lance has also announced the implementation of a Margin Improvement & Restructuring Plan to offset stranded costs that remain after the sale of Private Brands.

This plan is aimed at scaling the company’s operations appropriately with a focus on branded products as well as the DSD and Direct Sales networks.

The company plans to generate savings from a combination of operational initiatives and headcount reductions.

Annualised cost reductions are expected to be in the range of $22m to $25m, and will be realised progressively over the next 12 months starting in the third quarter.