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Workers for a division of Diamond Crystal
Brands aren't expected to be immediately impacted by its purchase by
Hormel Foods Corp.
Hormel Foods announced Wednesday that it had
agreed to buy assets from the nutritional products line of Diamond
Crystal Brands for $65 million in cash. Diamond Crystal Brands is
owned by Imperial Sugar Co., which also owns Savannah Foods.
However, the two subsidiaries are completely separate.
Diamond Crystal Brands has manufacturing plants
in Georgia, Ohio, California, Iowa and Indiana. Its Savannah plant
on Tremont Road will not be affected by the sale. Hormel is buying
just the assets related to its nutritional products line -- not the
real property or manufacturing facilities. Diamond Crystal Brands
will continue to produce specific products under an arrangement with
Hormel.
"It really is not a sale of any of our
plants," said Walter Lehneis, president of Diamond Crystal
Brands. "Only the product group is being sold to Hormel."
Lehneis declined to comment on the number of
workers employed either at Diamond Crystal Brands or through the
nutritional product line. Diamond Crystal Brands is a food service
company that makes such things as condiment packets and kits,
dessert and beverage mixes, sauces and gravies.
Its nutritional products business sells frozen
supplements, dry and ready-to-serve supplements, thickeners and
pureed products to the hospital and nursing home market.
The deal still must be approved by the U.S.
Bankruptcy Court in Delaware; Imperial Sugar filed for Chapter 11 on
Jan. 16. It's expected to close during the second quarter of this
year.
Imperial Sugar plans to apply about $50 million
from the Diamond Crystal sale to reduce its debt, according to a
company news release. But Lehneis said the sale was not made
strictly for the cash injection.
"It's being sold because it just did not
strategically fit the Diamond Crystal Brands food service
business," he said. "It was not sold to raise cash."
Imperial Sugar is the largest U.S. processor
and marketer of refined sugar under brands including Imperial,
Spreckels and Holly. The 157-year-old company struggled last year
under heavy debt, depressed sugar prices and high energy costs.
Business reporter Tasha
Gatlin can be reached at 652-0358 or at tgatlin@savannahnow.com. |