Diamond Foods Boosts Offering with Metcalfe's skinny Buyout

Diamond Foods, Inc. DMND is leaving no stone unturned to strengthen its product portfolio. In a recent move to boost its better-for-you snack options, the company acquired a 26% stake in Metcalfe's skinny Popcorn owner – Metcalfe's skinny Limited.

Metcalfe's skinny Popcorn is a renowned, superior ready-to-eat popcorn brand, which mainly caters to the fast-growing snack sections, particularly in the U.K. The buyout of a minority stake will enhance Diamond Foods' snack offering, and is likely to attract customers who are foodies and simultaneously seek light yet tasty snacks.

After the acquisition, which will be funded through cash, Metcalfe's skinny will continue to be operated as an independent subsidiary by its current management team.

Diamond Foods has been firing on all cylinders with regard to mergers and acquisitions, mainly in an attempt to solidify its product assortment to augment demand and drive results.

In this regard, the company also announced a merger agreement with Charlotte-based snack maker – Snyder's-Lance Inc. LNCE in Oct 2015. Per the deal terms, the latter will buy all Diamond Foods' shares in a cash and stock deal, which is expected to close in early 2016. The combined entity is likely to benefit from a larger scale of business and better capabilities, together with Snyder's strong distribution network and cost-curtailment strategies.

Apart from this, in Sep 2015, Diamond Foods stated that its premium Pop Secret brand will be the official popcorn sold at Disneyland Resort in California and Walt Disney World Resort in Florida, per an agreement between Diamond Foods and The Walt Disney Company DIS.

Also, Diamond Foods acquired a 51% stake in Yellow Chips, a manufacturer of first-rate vegetable and organic potato chips that is expected to enhance its position in the growing vegetable chips category in Europe and the U.K.

Clearly, Diamond Foods has been intently focused on capturing market share through expansion of its existing product lines and introduction of new products in the U.S.

Zacks Rank

Diamond Foods currently carries a Zacks Rank #4 (Sell). A better-ranked stock in the same industry is Campbell Soup Company CPB, with a Zacks Rank #1 (Strong Buy).

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