Diamond Foods to buy Pop Secret from General Mills
August 14th, 2008 | by admin |(Reuters) - Diamond Foods Co (DMND.O: Quote, Profile, Research, Stock Buzz), a seller of snack food and related products, said it will buy the Pop Secret popcorn business from General Mills Inc (GIS.N: Quote, Profile, Research, Stock Buzz) for about $190 million in cash.
Stockton, California-based Diamond Foods expects the acquisition to add $85 million to $90 million in annualized sales. The deal will add slightly to earnings per share in the first financial year after accounting for increased marketing support and financing costs.
Pop Secret, which was introduced in 1985, is one of the top brands of popcorn in the $900 million U.S. microwave popcorn industry.
Diamond foods said it plans to fund the purchase, in part, with the proceeds from a new five-year $250 million credit facility.
General Mills, the maker Cheerios cereal, Progresso soup and Yoplait yogurt, expects cash proceeds of about $160 million after transaction-related costs and to record a one-time gain on the sale in its 2009 financial year results.
Shares of Diamond Foods closed at $26.17 Wednesday on Nasdaq. General Mills shares closed at $67.09 on the New York Stock Exchange.
(Reporting by Sriram Iyer in Bangalore; Editing by Pratish Narayanan)
