Snack maker Snyders-Lance, which owns a plant in Columbus, said Tuesday it has sold off its private brands and two facilities, with an overall plan to aggressively restructure itself.
The Columbus operation, with its main office at 900 8th St., and formerly known as Toms Foods, was not one of the properties sold. Those were in Burlington, Iowa, and Ontario, Canada.
Charlotte, N.C.-based Snyders-Lance said it sold the assets to Massillon, Ohio-based Shearers Foods for $430 million, netting about $300 million after taxes. The deal was disclosed in early May and just completed.
This is an important step forward for Snyders-Lance as we dedicate our attention to our branded portfolio, Carl E. Lee, Jr., the firms president and chief executive officer, said in a statement.
The company said the sale of the private brands and plants, along with its recent $195 million buyout of Baptistas Bakery, will reduce net revenue by $250 million a year.
Thus, it plans to scale the companys operations appropriately and focus on its branded products, which include Snyders of Hanover, Lance, Cape Cod, Toms, Archway and O-Ke-Doke. The company said it also will use the healthier better for you product format of Baptistas, along with developing more premium snacks, to diversify its business.
Of the expense cuts, Snyders-Lance said, Savings are expected to come from a combination of operational initiatives and headcount reductions ... and will be realized progressively over the next 12 months starting in the third quarter.
The company said the cost reductions should be in an annualized range of $22 million to $25 million. There were no specifics released on individual plants, including the one in Columbus. More details will be forthcoming during an earnings call in early August, it said.
This is a major initiative for the company to ensure its cost base is managed aggressively, the company said.
Toms Foods, according to its website, now peddles a variety of salty snacks, including nine varieties of potato chips, eight flavors of pork rinds, cheese puffs, rings, fries, bugles, and corn and tortilla chips.
Snyders-Lance and Toms Foods both are no stranger to corporate buyouts.
Lance gobbled up Columbus-based Toms Foods in October 2005, paying just under $38 million for the then-80-year-old company that had racked up $63 million in debt before entering bankruptcy court and turning the pensions of 3,500 retired and former workers over to the federal Pension Benefit Guaranty Corp. It had unfunded the pensions by $43 million.
Founded in 1925 by businessman and inventor Tom Huston, the company had several ownership changes throughout its history, including being bought by General Mills, Rowntree-Mackintosh, TF Acquisition Corp., and Heico Acquisitions.
Lance, which dates to 1913, merged with Hanover, Penn.-based Snyders of Hanover in 2010, creating the second-largest snack food company in the U.S. The corporate headquarters remained in Charlotte. Snyders was founded in 1909.
The publicly traded Snyders-Lance now operates plants in North Carolina, Pennsylvania, Arizona, Florida, Georgia, Indiana, Ohio, Massachusetts and Wisconsin.
Shares of Snyders-Lance rose 72 cents, or 2.7 percent, to $27.18 in trading Tuesday on the Nasdaq exchange. The stocks 52-week trading range is $24.96 to $32.49 per share.