Campbell Soup Co. said Monday it had completed its $6 billion acquisition of Snyder’s-Lance Inc. in a move that shifts the Camden company’s center of gravity away from the long-struggling soup business to faster-growing though less-profitable snacks.
The combined companies have $10 billion in annual revenue, but the deal came at a significant cost to Campbell’s balance sheet, which now carries about $10 billion in debt, up from $3.5 billion at the end of its most recent fiscal year in July. Campbell recently borrowed $5.3 billion to help pay for Snyder’s-Lance. Late last year it also went into debt to buy Pacific Foods for $700 million.
Campbell said it expected to trim $170 million in costs related to the Snyder’s deal by the end of fiscal 2022. Over the same period, the company said last month at an investor conference that it was committed to reducing a debt ratio of 3-to-1 from an estimated 4.8-to-1 now. That ratio measures the amount of cash generated by a business relative to its total debt.
Snyder’s-Lance, of Charlotte, N.C., had $2.2 billion in net sales for the year ended Dec. 30, 2017.