Hormel Foods purchases Skippy (peanut butter) for 700M
Skippy generates ~370M in annual revenue. Gets taken out for 1.9x revenue.
That is a pretty significant premium I would say. Both Hormel and Unilever investors applauded the deal. Diamond could have a similar fate, sooner rather than later.
There is a ton of consolidation in the food/snacks industry as we have witnessed in the last several months. Currently sitting near an ALL TIME LOW, Diamond Foods is a prime takeover target now more than ever before (I know it sounds like a broken record). One has to wonder why it is flying under the radar especially now that they are current with the SEC and Nasdaq.
I also notice that the last month of trading has been dead money (both for shorts and longs) and is forming a nice consolidated base with three higher bottoms. We could see a breakout from here.
981mil rev X 1.9 sale factor = 1.86bil sale price less 605mil debt leaves equity of 1.255.bil. Divide that by 22.07mil shares outstanding and that equals $56.86 per share. Anyone think that is possible? DMND has several strong brands that have strong value if we can get them into the hands of competent management. Lets hope a good buyer comes along before present management destroys the value of these brands.
Just 2 weeks back , for the first time I saw Diamond of California nuts in Sam's club in our local area(NC). Their walnut quality is very good and even my kids take them for snack to school.Just yesterday,I saw snack size nuts packages in our local grocery store.It's not long ago that Kettle brand are under Kirkland signature in Costco.I see that they are marketing better than before ,but still wonder about it's price.Been observing this and it's products for over a year,but did not invest in yet.Hmmm,probably worth the risk now for long term investing.