San Fransisco-based snack company Diamond Foods has announced the acquisition of certain assets including the Harmony Foods brand for US$18m in cash and the assumption of certain defined liabilities.
Among the assets acquired are Harmony’s processing and packaging plant in Fishers, Indiana, the Harmony and Homa brands, and $4.5m of working capital.
As a result, Diamond operations at its nut and snack facility in Lemont, Illinois, will be terminated and transferred to the Harmony facility, eliminating 20 positions and costing approximately $1m in severance, retention payments, and equipment moving costs over the next six months.
The transfer is expected to save the company around $2m a year once put into place.
The Fishers plant produces trail mixes, specialty dried fruits, nuts and seeds, sweet snacks and organic snacks, in multiple packaging options.
Harmony’s branded packaged snack product sales were said to be tracking towards about $10m for the financial year.
Diamond president and chief executive officer Michael Mendes said: “This acquisition represents an ideal strategic fit for Diamond. Harmony adds production capability and product line expansion which will significantly increase our scale in the snack category.
“Our opportunity is to improve the quality of the sales of Harmony products and to increase the volume of strategic, branded, higher margin products under the Emerald brand umbrella, while at the same time rationalising excess SKU’s and gaining more permanent distribution for Harmony products.
“These efforts, along with our on-going activities for our Emerald snack products, should drive fiscal 2007 snack sales in excess of $80m.”