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Dean Bradley Osborne Advises Silver Lake on Financing of Dell Buyout
September 12, 2013 – Dell today announced that, based on a preliminary vote tally from the special meeting of stockholders, Dell stockholders have approved the proposal in which Michael Dell, Dell’s Founder, Chairman and CEO, will acquire Dell in partnership with global technology investment firm Silver Lake Partners.
In connection with the transaction, Dell stockholders will receive $13.75 in cash for each share of Dell common stock they hold, plus payment of a special cash dividend of $0.13 per share to stockholders of record as of a date prior to the effective time of the merger, for total consideration of $13.88 per share in cash. The agreement also guarantees the regular quarterly dividend of $0.08 per share for the fiscal third quarter would be paid to holders of record as of a date prior to closing. The total transaction is valued at approximately $24.9 billion.
The preliminary vote tally shows that the transaction was approved by the holders of a majority of Dell’s outstanding shares, as required by Delaware law. In addition, the tally shows that the transaction was approved by the holders of a majority of Dell’s shares voting for or against the matter, excluding shares held by Mr. Dell, certain of his related family trusts, Dell’s Board of Directors and certain members of its management, as separately required under the merger agreement.
“I am pleased with this outcome and am energized to continue building Dell into the industry’s leading provider of scalable, end-to-end technology solutions,” said Michael Dell, chairman and CEO of Dell. “As a private enterprise, with a strong private-equity partner, we’ll serve our customers with a single-minded purpose and drive the innovations that will help them achieve their goals.”
Mr. Dell continued, “I would like to thank our 110,000 team members around the world who, throughout this process, have remained focused on serving our customers with unity, purpose and pride. As our company continues to expand its enterprise solutions and services business, our team members will be Dell’s most valuable asset and the key to our future success.”
“Over the course of more than a year, the Special Committee and its advisors conducted a disciplined and independent process to ensure the best outcome for Dell stockholders,” said Alex Mandl, chairman of the Special Committee formed to evaluate the transaction and other strategic alternatives. “By voting in favor of the transaction, the stockholders have chosen the best option to maximize the value of their shares. I want to thank my fellow Committee members and the entire Board for their diligent and tireless efforts on behalf of Dell stockholders, and the stockholders themselves for the careful consideration they gave to this important matter.”
The transaction is expected to close before the end of the third quarter of Dell’s FY2014, subject to the satisfaction of customary closing conditions, including regulatory approval. Dell will continue to be headquartered in Round Rock, Texas.
ST. PETERS, Mo., Sept. 13, 2013 /PRNewswire/ – SunEdison, Inc. (the “Company”) (NYSE: SUNE) today announced the pricing of a public offering of 30,000,000 shares of common stock at a price of $7.25 per share. Closing of the offering is expected to occur on September 18, 2013, subject to customary closing conditions. The underwriters have been granted a 30-day option to purchase up to an additional 4,500,000 shares of common stock from the Company, all at the offering price less the underwriting discount. The Company intends to use the net proceeds for general corporate purposes, which it expects to include funding working capital and growth initiatives. Deutsche Bank Securities and Goldman, Sachs & Co. are acting as lead book-running managers for the offering. Wells Fargo Securities is also acting as a book-running manager.
This offering is being made pursuant to a shelf registration statement which was filed with the Securities and Exchange Commission (the “SEC”) and became effective on September 9, 2013. A preliminary prospectus supplement and the accompanying prospectus relating to these securities has been filed with the SEC and is available on the SEC’s website at http://www.sec.gov. Copies of the preliminary prospectus supplement and the accompanying prospectus relating to these securities may also be obtained by sending a request to: Deutsche Bank Securities Inc., Attention: Prospectus Group, 60 Wall Street, New York, NY 10005-2836, telephone: (800) 503-4611, e-mail: firstname.lastname@example.org; Goldman, Sachs & Co., Attn: Prospectus Department, 200 West Street, New York, New York 10282, telephone: 866-471-2526, facsimile: 212-902-9316, e-mail: email@example.com; or Wells Fargo Securities, LLC, Attn Equity Syndicate Dept., 375 Park Avenue, New York, NY 10152, telephone: (800) 503-4611, e-mail: firstname.lastname@example.org.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy the Company’s common stock or any other securities, and there shall not be any offer, solicitation or sale of securities mentioned in this press release in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such any state or jurisdiction.
ST. PETERS, Mo., Aug. 22, 2013 /PRNewswire/ – SunEdison, Inc. (NYSE: SUNE) announced today that its Board of Directors has unanimously approved an initial public offering of its semiconductor business to create SunEdison Semiconductor, Inc. SunEdison plans to sell a minority ownership interest in the semiconductor business to the public. SunEdison expects to use proceeds from the separation to fund initiatives related to the solar business, to repay existing indebtedness and for general corporate purposes.
The newly formed SunEdison Semiconductor will operate as an independent company with a new board of directors.
“Today’s announcement represents the next evolution in our strategic plan to better position both our solar and semiconductor businesses for sustainable, long-term success,” said Ahmad Chatila, Chief Executive Officer of SunEdison. “This new structure will allow each independent company to pursue its shareholder value generating strategies, focus on key markets and customers, optimize capital structures, and enhance access to growth capital for each company in the years ahead. Given the significant accomplishments of the businesses to date, it is the right time for this transaction which we believe maximizes value to our investors while benefiting our customers and employees.”
SunEdison expects to file a registration statement with the Securities and Exchange Commission (SEC) in the third quarter of 2013, with the initial public offering scheduled by early 2014, subject to market conditions. A final decision regarding the amount of interest to be sold to the public at the time of the initial public offering will be determined by SunEdison’s Board of Directors at a date to be determined.
Completion of the initial public offering and related items are subject to certain customary conditions, including approval by SunEdison’s Board of Directors of the final terms of the initial public offering, receipt of all regulatory approvals, including the effectiveness of the registration statement filed with the SEC.
This press release is not an offer to sell or a solicitation of offers to buy any securities. If an initial public offering is made, such offers will be made only by a prospectus filed with the SEC.
Forbes: Dell to test Silver Lake’s skills as ‘undertaker’
By Richard Waters in San Francisco and Henny Sender in New York
In Silicon Valley, where investors worship at the altar of growth, Silver Lake Partners is an unusual animal.
“They’re the undertakers of the technology industry,” says one prominent Valley venture capitalist, expressing a common disdain locally for the profits the buyout house has wrung out of mature parts of the sector.
Now, with its plan to take struggling PC maker Dell private in the biggest ever tech buyout, Silver Lake is about to put to the test its 14 years of experience in conjuring profits out of buying companies that have missed the tide of tech history.
Applying the techniques of the buyout business to the tech sector has turned the California-based group into one of the most successful large US private equity houses, though it has also had some bumps along the road.
Its third investment fund, a $9.6bn pool of money raised in 2007, has made a net annualised return of 17 per cent as of the end of September, according to a letter sent to one of its investors. Silver Lake insiders have made substantially more: before fees and carried interest – the share of profits kept by the firm – the gross return on its 2007 fund is 26 per cent, according to the investor letter.
The returns help to explain why, at a time when some other buyout groups are struggling to raise large funds, Silver Lake has already hit the $7.5bn target for its latest fund and may add more before closing the round, according to a person familiar with its capital-raising.
The potential Dell bid, worth as much as $25bn, at a time most believe that the PC maker “is both on the wrong side of history and of technology,” as one rival buyout executive puts it, highlights the approach that has characterised Silver Lake’s deals.
Founded by a mix of financial and technology specialists – Oracle executive David Roux, tech banker Jim Davidson, Blackstone executive Glenn Hutchins and tech investor Roger McNamee – its counter-intuitive plan to bring private equity to bear on tech at the height of the dotcom bubble made it one of the few to specialise in the industry.
Its best-known deals have, like Dell, involved companies with well-established positions in their markets. The 2000 buyout of disc drive maker Seagate put Silver Lake on the map by producing a return of five times its investment. The acquisition of internet communications company Skype returned 3.1 times the investment in only 18 months.
Others in private equity claim to see little value in taking Dell private. “It is fairly valued,” says another private equity executive. “It has already been through major cost-cutting. What would we do that Michael Dell hasn’t already done?”
Greater experience in a single sector makes it more willing to back such deals, according to the Silver Lake’s supporters. “I used to think a single sector fund was risky,” says Mark Bradley, who formerly headed Morgan Stanley’s advisory practice dealing with private equity firms and is one of the co founders of San Francisco based banking boutique, DBO Partners. “But they have deep, deep sector expertise and phenomenal contacts.”
The returns have not been even. Silver Lake’s first fund brought its investors a net annual return of 25.1 per cent, according to figures published by Calpers, the California teachers pension fund. But its second fund has netted only 10 per cent, thanks to underperformers like Sungard Data Systems, at the time the largest tech buyout.
Weaker investments in its latest fund include small stakes in Zynga and Groupon, made shortly before those companies’ IPOs and subsequent share-price collapses.
If Silver Lake pulls off its attempt to lead a Dell buyout, it will cap the rise of a new generation at the firm – something few private equity houses beside Warburg Pincus have been able to manage. Of the founders, only Mr Davidson remains fully active, according to people who know the group.
In their place, a new group of younger executives have come to the fore and will share in a bigger share of Silver Lake’s profits than the founders: Egon Durban, responsible for the Skype deal; Ken Hao, who led the investment in Chinese commerce company Alibaba; Mike Bingle and Greg Mondre.
Whether a Dell deal, if completed, turns out to be a Seagate-like success or a flop like Sungard will go a long way to determining if Silver Lake’s new generation of dealmakers inherit the role of preferred undertakers to Silicon Valley.
Investment Banking Entrepreneur
Mark Bradley, BS 85
Dean Bradley Osborne
Entrepreneurial ventures aren’t the exclusive territory of the young. After 25 years with Morgan Stanley, Mark Bradley and a handful of partners peeled off earlier this year to start a boutique investment bank, Dean Bradley Osborne (DBO)—and quickly put together deals worth billions.
To Bradley, DBO is a return to the purer form of investment banking that he joined after graduating from Berkeley in 1985. At the time, says Bradley, “Morgan Stanley was a true investment bank; investment banking made up 75 percent of its revenue.” Now it’s less than 15 percent. This is where DBO sees an opening: “We can give CEOs the kind of personal focus, senior-level attention they deserve, without any biases or conflicts.”
Already, DBO has managed a $1.5 billion merger of San Francisco engineering firm URS and Canada’s Flint Energy; shepherded a $225 million investment into troubled nut company Diamond Foods; and worked on private equity firm Silver Lake Partners’ investment in the William Morris Endeavor talent agency. “We’re not a boutique firm that only does deals the big banks don’t want to do,” Bradley says.
Perched high in an office in Embarcadero Center with sweeping bay views, Bradley is a world away from his childhood in Hawaii. “I wouldn’t be anywhere near here if not for my time at Haas,” he says.
He traces his entrepreneurial drive, meanwhile, to his mother, who started a business from scratch and turned it into the biggest Hawaiian real estate firm of its time. He says, “Everything I’ve learned about business started with her.”
Dean Bradley Osborne Advises Diamond Foods on Investment from Oaktree Capital Management
SAN FRANCISCO and LOS ANGELES, May 23, 2012 (GLOBE NEWSWIRE) — Diamond Foods, Inc. (Nasdaq:DMND) (“Diamond”), an innovative, branded packaged food company, and Oaktree Capital Management, L.P. (NYSE:OAK) (“Oaktree”), a leading global investment management firm, today announced that Diamond and Oaktree have entered into definitive agreements to recapitalize Diamond’s balance sheet with an investment by Oaktree of $225 million in Diamond. Concurrent with the closing of this investment, Diamond will amend its credit agreement with its existing lenders. The recapitalization will result in a capital structure that supports the Company’s long term strategy as well as the execution of its current business plan. The recapitalization will allow Diamond to further strengthen the Company’s leadership position in the walnut industry, continue the growth of its snack business and reduce the amount of existing bank debt. The transactions are expected to close by the end of May 2012.
“Oaktree has an exceptional track record of supporting the growth of leading companies in the consumer sector,” said Brian Driscoll, Diamond Foods’ President and CEO. ”Their expertise and resources will be invaluable as we solidify our market position in the walnut industry and seek to continue to grow our snack brands.” “In connection with Diamond’s thorough review of capital alternatives, the Company received interest from a number of top tier investment firms,” Mr. Driscoll continued. ”We are very pleased with our decision to partner with Oaktree, an experienced investor with an outstanding reputation. Looking forward, our balance sheet strength will provide a solid foundation from which to build as we position Diamond for the opportunities ahead that can deliver value to our shareholders, our growers and our customers.”
“We are pleased to have the opportunity to partner with Diamond and provide additional resources and capabilities to drive strong financial and operating performance and position the Company for long-term success,” said Matthew Wilson, Managing Director, Oaktree Capital Management. ”We recognize the value of Diamond’s high quality brands and their leadership position in the walnut industry. We look forward to working with Diamond’s management team to continue building upon the momentum of recent months.”
The investment of new capital by Oaktree, in conjunction with the amended bank credit facility, will provide Diamond with sufficient liquidity to meet its anticipated near-term and long-term funding needs. The Oaktree investment initially consists of $225 million of newly-issued senior notes and warrants to purchase approximately 4.4 million shares of Diamond common stock. The senior notes will mature in 2020 and will bear interest at 12 percent per year that may be paid-in-kind at Diamond’s option for the first two years. Oaktree’s warrants will be exercisable at $10 per share, and would constitute a fully diluted ownership level of approximately 16.4 percent of the Company.
The agreements provide that if Diamond secures a specified minimum supply of walnuts from the 2012 crop and achieves profitability targets for its nut businesses for the six-month period ending January 31, 2013, all of the warrants will be cancelled and Oaktree may exchange $75 million of the senior notes for convertible preferred stock of Diamond. The convertible preferred stock would have an initial conversion price of $20.75, which represents a 3.5 percent discount to the closing price on April 25, 2012, the date that the Company entered into its commitment with Oaktree. The convertible preferred stock would pay a 10 percent dividend that would be paid in-kind for the first two years.
“We are pleased with the progress across our walnut initiatives and with the efforts over the last three months to restore and strengthen the company’s relationships with its growers at a time of record walnut prices,” added Brian Driscoll. ”These extensive efforts, along with the goal of providing competitive prices and terms for our growers, are focused on reestablishing the success of this business and expanding our leadership position in the walnut industry.”
The amendment to Diamond’s senior secured credit facility with its lenders includes a lower level of total bank debt, initially at $475 million, along with substantial covenant relief until October 31, 2013.
Upon the closing of the transaction, Matthew Wilson, a Managing Director of Oaktree, and Dean Hollis, a Senior Advisor to Oaktree and former President and COO of ConAgra Foods will join Diamond’s Board of Directors.
Diamond Foods was advised in this transaction by Dean Bradley Osborne and Fenwick & West LLP and Oaktree was advised by Latham & Watkins LLP. More information about this transaction can be found on the Company’s website in the presentation archive in the investor relations section.
Diamond Foods is an innovative packaged food company focused on building and energizing brands including Kettle® Chips, Emerald® snack nuts, Pop Secret® popcorn, and Diamond of California® nuts. Diamond’s products are distributed in a wide range of stores where snacks and culinary nuts are sold. For more information visit our corporate web site: www.diamondfoods.com.
The Diamond Foods, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6112
Oaktree is a leading global investment management firm focused on alternative markets, with $77.9 billion in assets under management as of March 31, 2012. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in distressed debt, corporate debt (including high yield debt and senior loans), control investing, convertible securities, real estate and listed equities. Headquartered in Los Angeles, the firm has over 650 employees and offices in 13 cities worldwide. For additional information, please visit Oaktree’s website at www.oaktreecapital.com.
Dean Bradley Osborne Advises URS on Acquisition of Flint Services
SAN FRANCISCO, CA – May 14, 2012 – URS Corporation (NYSE: URS) and Flint Energy Services Ltd. (TSX: FES) announced today that URS has completed its acquisition of Flint. Under the terms of the definitive agreement announced in February, Flint shareholders received C$25.00 per share in cash for each Flint share. The total equity value paid by URS was approximately C$1.24 billion (US$1.24 billion).
“We are pleased to have completed the acquisition of Flint, which significantly expands our presence in the oil and gas sector, and in particular the growing North American unconventional oil and gas segments,” said Martin M. Koffel, Chairman and Chief Executive Officer of URS. ”URS is now able to provide our energy sector customers with a full range of engineering, procurement and construction services, which has been a longstanding strategic priority for URS and builds on our track record of expanding into high growth markets and further diversifying our revenue and backlog. We are delighted to welcome to URS more than 10,000 Flint employees, who expand our skilled team of professionals.”
Through the acquisition of Flint, URS has added a network of approximately 80 locations in North America that support many of the largest companies operating in the oil, oil sands and gas producing regions of Western Canada and in the Southwest, Appalachian and Rocky Mountain regions of the United States.
Flint has become the new Oil & Gas division of URS and will be led by W.J. (Bill) Lingard, Flint’s former President and CEO, as the Division President. The Oil & Gas division will be based in Calgary, Alberta.
The transaction is expected to be accretive to URS’ 2012 earnings, and to substantially increase URS’ revenues from the oil and gas sector.
URS and Flint also announced that they have reached an agreement with Transfield Services Limited to continue Flint Transfield Services Limited (FT Services) as a 50/50 operations and maintenance joint venture between Transfield and the URS-owned Flint. FT Services, originally formed in 2006 as a 50/50 jointly owned company between Transfield and Flint, delivers operations and maintenance solutions to the oil and gas and petrochemical sectors in Canada.
The acquisition was implemented through a court-approved Plan of Arrangement under the Business Corporations Act (Alberta, Canada) involving Flint, URS Canada Holdings Ltd., a wholly-owned subsidiary of URS, and the shareholders, option holders and other equity-based compensation holders of Flint. Flint’s board of directors has been reconstituted to include nominees of URS.
Details of the Arrangement are contained in Flint’s Information Circular dated February 29, 2012. Copies of the Information Circular, together with the letter of transmittal, were posted to Flint shareholders and option holders and are also available electronically on SEDAR at www.sedar.com.
URS utilized the net proceeds from its Senior Notes issued on March 15, 2012, as well as borrowings under URS’ existing credit facility, to fund the acquisition of Flint, to pay fees and expenses incurred in connection with the acquisition of Flint, and to repay certain outstanding indebtedness of Flint.
In connection with the completion of the transaction, it is anticipated that Flint’s shares will de-list shortly from the Toronto Stock Exchange.
About URS Corporation
URS Corporation (NYSE: URS) is a leading provider of engineering, construction and technical services for public agencies and private sector companies around the world. The Company offers a full range of program management; planning, design and engineering; systems engineering and technical assistance; construction and construction management; operations and maintenance; information technology; and decommissioning and closure services. URS provides services for power, infrastructure, industrial, oil and gas, and federal projects and programs. Headquartered in San Francisco, URS Corporation has approximately 56,000 employees in a network of offices in nearly 50 countries (www.urs.com).
Dean Bradley Osborne Advises Silver Lake on its Investment in William Morris Endeavor
Silver Lake’s Investment to Accelerate Digital Growth Strategy and Capitalize on the Convergence of the Technology, Media and Content Industries
BEVERLY HILLS, Calif. and MENLO PARK, Calif., May 2, 2012 /PRNewswire/ – William Morris Endeavor Entertainment (WME), one of the world’s leading entertainment and media companies, and Silver Lake, a global leader in technology investing, announced today that they have launched a new strategic partnership and have signed a definitive agreement for Silver Lake to acquire a minority stake in the company.
In a statement the WME Management Board said: “Our partnership with Silver Lake will accelerate WME’s transformation into a technologically innovative entertainment and media company and ensure we can best support our clients across all digital media channels. This investment will give WME access to Silver Lake’s expertise, resources and relationships across the global technology industry, ensuring our clients and the content they create are strategically positioned for the future as the convergence of technology, entertainment and media accelerates.”
“Partnering with Silver Lake aligns WME with the global leader in technology investing, and ensures that all of our clients across film, TV, music, literature and other genres can capitalize on the dramatic new opportunities emerging from the digital media revolution,” said WME Co-CEOs Patrick Whitesell and Ariel Emanuel. ”While we have already taken significant strategic steps to transition our business to the new digital media landscape, we are excited about the financial strength and technology expertise Silver Lake brings, which will enable us to expand WME’s growth strategy into digital media and create compelling new opportunities for our clients.”
WME has an unparalleled global client base, representing many of the world’s most prominent artists, performers and content creators. In recent years WME has made over 15 strategic investments in companies across the digital media landscape, including the interactive advertising, social media, social gaming and online retail sectors.
Egon Durban, a Managing Partner of Silver Lake, will join WME’s Executive Committee along with the company’s Co-CEOs and will also help create a new Technology Advisory Council that will identify technology related growth opportunities which would benefit WME’s clients. WME’s day to day operations will continue to be run by its current leadership team and Management Board. Ariel Emanuel, Patrick Whitesell and the entire management team have all renewed long-term contracts with WME.
“Across the global technology and media landscape, digital forces are disrupting and transforming how content is produced, distributed and monetized,” said Durban. “WME’s clients produce some of the highest quality and most valued content available across both traditional and new media. We believe that WME is a strategic platform for investments and partnerships, positioned at the epicenter of the converging technology and content industries. We admire what Ari, Patrick and their world-class management team have achieved over the last 17 years since Endeavor was founded, including the successful merger with the William Morris Agency. We believe that the impact of technology across the global media, entertainment and content industries will continue to provide WME and its clients with many new compelling opportunities and we are excited to partner with WME on the next phase of their growth.”
The transaction is subject to customary closing conditions. Terms of the transaction were not disclosed.
WME was advised in the transaction by The Raine Group and Paul, Weiss, Rifkind, Wharton and Garrison LLP. Silver Lake was advised by Simpson Thacher & Bartlett LLP.
About William Morris Endeavor Entertainment
Leading entertainment and media company WME represents elite artists from all facets of the industry, including motion pictures, television, music, theatre, publishing and physical production. WME also advises some of the world’s most recognized consumer brands to create entertainment-based marketing solutions and invests in companies across the digital media landscape. WME is headquartered in Beverly Hills with offices in New York, London, Nashville and Miami.
About Silver Lake
Silver Lake is the global leader in private investments in technology and technology-enabled industries. Silver Lake invests with the strategic and operational insights of an experienced industry participant. The firm has over 100 investment professionals and value creation specialists located in New York, Menlo Park, San Francisco, London, Hong Kong, Shangai and Tokyo and manages approximately $14 billion. The Silver Lake portfolio includes or has included technology industry leaders such as Alibaba, Allyes, Ameritrade, Avago, Avaya, Business Objects, Flextronics, Gartner, Gerson Lehrman Group, Groupon, Instinet, Intelsat, Interactive Data Corporation, IPC Systems, MCI, Mercury Payment Systems, MultiPlan, the NASDAQ OMX Group, NetScout, NXP, Sabre, Seagate Technology, Serena Software, Skype, Spreadtrum, SunGard Data Systems, UGS, Vantage Data Centers and Zynga. For more information about Silver Lake and its entire portfolio, please visit www.silverlake.com
SAN FRANCISCO, CA, March 13, 2012 – Diamond Foods, Inc. (NASDAQ: DMND) (“Diamond”) today provided business and brand updates to give its stakeholders greater visibility into the progress of its accounting restatement, actions being taken to strengthen Diamond’s balance sheet and factors influencing Diamond’s performance, including walnut pricing.
“Since February 8, 2012, Diamond’s team has taken a number of actions to address the issues facing the Company and to better position Diamond for the opportunities we see going forward,” said Rick Wolford, Diamond’s Interim President and Chief Executive Officer. “The Company, working with Interim Chief Financial Officer Mike Murphy and his team from Alix Partners, is progressing well in working with our banks and addressing financial reporting and restatement issues. To assist Diamond in assessing our capital structure and evaluating ways to strengthen the balance sheet, the Company has retained Dean Bradley Osborne Partners LLC as its financial advisor.”
Diamond and its advisors are making substantial progress strengthening the Company’s financial reporting and control capabilities and restating Diamond’s consolidated financial statements for fiscal years 2010 and 2011. The timing of the restatement has not yet been finalized.
“With regard to its core business, Diamond’s management team is sharply focused on optimizing the strategy, performance and execution of each of its product lines,” added Rick Wolford.
Extensive efforts are underway to reset the Company’s walnut activities and to restore and strengthen Diamond’s relationships with growers. Increased global demand for walnuts has driven pricing to record levels of at least 35 percent higher than for last year’s crop. Diamond, as it refocuses on its walnut supply, intends to be competitive in its walnut sourcing activities, and expects its walnut-related cost of sales to rise in line with current pricing trends. Diamond is taking pricing action to address this cost issue.
Diamond’s snack brands have continued to deliver strong retail sales, with share gains for Emerald, Pop Secret and Kettle in the most recent 12-week Nielsen tracking period. While Diamond’s fiscal 2012 non-retail walnut sales were down significantly due to less supply, Diamond’s culinary branded retail sales are up 7 percent in the 12-week period, largely on the strength of price increases implemented in the past year.
Diamond’s U.S. Nielsen retail scanner performance data for the twelve-week period ended February 18, 2012 in the food, drug and mass channels was as follows:
|Brand YoY Growth||Category YoY Growth||Market Share Change|
|Emerald||+29%||+3%||+ 200 basis points|
|Pop Secret||+6%||+2%||+110 basis points|
|Kettle U.S.||+8%||+1%||+ 20 basis points|
|Diamond of California||+7%||+8%||- 30 basis points|
Sources: Nielsen U.S. Food, Drug and Mass dollar sales for 12-week period ended February 18, 2012. All comparisons are to the same measured period in the prior year.
“Despite the challenges we have faced over the past several months, our brands continue to perform well and we believe the steps we are taking will best position Diamond for the future,” continued Rick Wolford.
Diamond expects to update its outlook for fiscal 2012 after its financial restatement is completed.
Diamond Foods is an innovative packaged food company focused on building, acquiring and energizing brands including Kettle® Chips, Emerald® snack nuts, Pop Secret® popcorn, and Diamond of California® nuts. Diamond’s products are distributed in a wide range of stores where snacks and culinary nuts are sold. For more information visit our corporate web site: www.diamondfoods.com.
Note regarding forward-looking statements
Statements in this press release that relate to future results, events and expectations, including statements about our sales performance and future plans, cost of walnuts, the timing of our financial restatement and potential capital transactions, are forward-looking statements that necessarily depend on critical assumptions and are subject to risks and uncertainties. Actual results may differ materially from what we currently expect because of many risks and uncertainties, including: uncertainty about the timing and scope of our financial restatement; risks relating to our credit facility, including compliance with existing debt covenants and obtaining forbearance from our lenders; increase in the cost of debt, ability to raise additional capital, risks relating to litigation, relations with growers; availability and cost of walnuts and other raw materials; increasing competition and possible loss of key customers; and general economic and capital markets conditions. Risk factors affecting our business and prospects are described under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended July 31, 2011, and under “Additional Risk Factors” in our Current Report on Form 8-K filed with the SEC on November 28, 2011. All forward-looking statements and reasons why results might differ included in this press release are made as of the date of this press release, based on information currently available to Diamond’s management, and we assume no obligation to update any forward-looking statement or reasons why results might differ.
SVP, Corporate Strategy
(415) 445 -7444