UPDATE 1-Pepsi to buy Canadian snack maker, Spitz Int'l

NEW YORK, Oct 29 (Reuters) - PepsiCo Inc PEP.N on Wednesday said it agreed to buy Canadian sunflower and pumpkin seeds maker Spitz International Co, to boost its presence in the market for healthy snacks.

Pepsi, which already makes True North nut snacks and baked Lay’s potato chips as part of its push into the healthy snack category, said Spitz would be part of its Frito-Lay North America business unit.

Terms of the acquisition were not disclosed.

Spitz, established in 1982, sells sunflower seeds in six flavors, including dill pickle and chili lime, as well as flavored pumpkin seeds. The company will continue its Canadian operations in Bow Island and Medicine Hat, Alberta.

“Spitz enables Frito Lay Canada to grow our seed business in Canada and help us expand in the U.S., while supporting PepsiCo’s broader health and wellness strategy,” said Al Carey, president and chief executive of Frito-Lay North America.

Pepsi’s decision to buy Spitz comes as the meltdown in the financial sector and tough credit conditions have cast doubts on the closing of deals.

In the past quarter, revenue at Pepsi’s food unit, which includes Frito-Lay, was steadier than its beverage segment, as the U.S. housing slump, credit crunch and job losses forced consumers to change their consumption habits, hurting sales of soft drinks and bottled water, among others.

Earlier this month, Pepsi sold $2 billion in 10-year notes, and said it would use the net proceeds from the offering for general corporate purposes, including repayment of short-term debt. (Reporting by Aarthi Sivaraman; Editing by Maureen Bavdek)