Lance Gobbles Up Tom's Assets
Snack maker successful bidder for bankrupt rival
CHARLOTTE, N.C. -- Lance Inc. said that it is the successful bidder in a U.S. Bankruptcy Court-directed auction of the assets of Tom's Foods Inc., a U.S. based snack food manufacturer and distributor. The completion of the transaction is subject to approval of the sale by the U.S. Bankruptcy Court.
Tom's products include potato chips, nuts, sandwich crackers and other snack food items that are distributed through a combination of independent distributors and company-owned direct-store delivery routes.
Primary retail outlets for [image-nocss] Tom's products are convenience stores and vending machines in the Southeast United States. Tom's assets include five manufacturing facilities, which employ approximately 1,400 employees.
The purchase price for the assets of Columbus, Ga.-based Tom's, which filed bankruptcy on April 6, is $37.9 million, plus the assumption of certain current liabilities.
David V. Singer, president and CEO of Charlotte, N.C.-based Lance, said, "Tom's has a strong heritage and solid reputation in the snack food business, and we believe that this opportunity will make our company stronger. The transaction developed quickly, and we are still developing our plans. In the near term we intend to continue business as usual while we develop a plan to effectively meet the needs of our customers and consumers. We are confident that the combination of increased sales and operating synergies will create value for Lance Inc. stockholders."
Lance manufactures and markets snack foods throughout most of the United States and other parts of North America.
Earlier this month, The Deal reported that TF Acquisition Corp., a unit established by Tom's debtor-in-possession lender, Fleet Capital, had arranged a purchase of Tom's Foods assets for $15 million. TF Acquisition was designated the stalking-horse bidder for the assets.
Initially, the company, which blamed the high gasoline prices for lower-than-expected sales of its goods at convenience stores, planned to reorganize, The Deal said. But sales continued to erode, and the fallout from Hurricane Katrina forced the company to liquidate rather than continue as an ongoing company, it added.