March 11, 2010 (FinancialWire) — Diamond Foods, Inc. (NASDAQ: DMND) said that the underwriters of its recent follow-on public offering of common shares have exercised their overallotment option to acquire an additional 675,000 common shares. This brings the total number of shares issued in the offering to 5.175 million common shares.

Barclays Capital (NYSE: BCS), BofA Merrill Lynch (NYSE: BAC) and BMO Capital Markets (NYSE: BMO) acted as joint book-running managers.

The 5.175 million common shares were priced at $37 per share. After deducting the underwriting discount, the company expects to receive total net proceeds from the sale of its common shares of around $181.4 million.

Diamond Foods plans to use the net proceeds to pay a portion of the purchase price for its acquisition of Kettle Foods from Lion Capital LLP.

Diamond said it expects to close the acquisition of Kettle Foods before the end of its fiscal year 2010, subject to regulatory approvals. If the company does not consummate the acquisition of Kettle Foods, it intends to use the net proceeds for general corporate purposes, including repayment of existing indebtedness.

California-based Diamond Foods is a packaged food company that sells Diamond of California culinary nuts, Emerald snack nuts, and Pop Secret microwave popcorn.

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