Diamond Foods to acquire Kettle Foods

SAN FRANCISCO Diamond Foods has entered into a definitive agreement to acquire Kettle Foods, makers of premium potato chips, from Lion Capital LLP for $615 million in cash.

Diamond will acquire Kettle operations in both the United States and the United Kingdom.

As part of the agreement, Diamond will purchase all outstanding shares of the snack maker. Kettle Foods would add more than $250 million in revenues and almost double Diamond’s EBITDA, Diamond projected.

The transaction is expected to close by the end of Diamond’s fiscal year 2010, subject to customary conditions, including regulatory approval.

“Kettle Foods’ passion for making great tasting, natural potato chips has attracted a loyal consumer following and shaped a truly premium brand that has our deep respect,” said Michael Mendes, chairman, president and CEO of Diamond Foods. “Diamond and Kettle Foods share a history of relentless focus on flavor and product quality and working collaboratively with our retail partners. By adding Kettle, including its talented team of employees, our snack business will have greater scale, which will help us to drive even greater innovation in the snack market. We expect that the acquisition will be accretive in the first year and is a strong, strategic fit to better support our long-term growth plans.”

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