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The J. M. Smucker to Divest its US Baking Business in USD 375m Deal
Thursday 12 July 2018

12 July 2018 - US-based food and beverage company The J. M. Smucker Company (NYSE: SJM) has signed a definitive agreement to sell its US baking business to Brynwood Partners VII L.P. and Brynwood Partners VIII L.P., subsidiaries of investment firm Brynwood Partners, in a transaction valued at USD 375m, the company said.

The transaction primarily encompasses products sold in US retail channels under the Pillsbury, Martha White, Hungry Jack, White Lily, and Jim Dandy brands, along with all relevant trademarks and licensing agreements, and the company's manufacturing facility in Toledo, Ohio.

This business generated net sales of approximately USD 370m for the company's fiscal year ended April 30, 2018, which were primarily reported in its US Retail Consumer Foods segment.

The transaction does not include the company's baking business in Canada.

Smucker expects the divestiture to be dilutive to its adjusted earnings per share by USD 0.25 to USD 0.30 on a full-year basis, reflecting foregone profit related to the US baking business, before factoring in any potential benefit from the use of proceeds from the sale.

However, the company expects the net impact of the divestiture to be only slightly dilutive to its fiscal 2019 adjusted earnings per share, as foregone profit for the remainder of the fiscal year is expected to be mostly offset by an anticipated one-time gain on divestiture.

This expectation also excludes any potential benefit from the use of proceeds from the sale. The company will further discuss the transaction's anticipated impact on its fiscal 2019 outlook when it releases its fiscal 2019 1Q results in August.

The transaction is expected to close in the second quarter of the company's 2019 fiscal year, subject to customary closing conditions, including receipt of required regulatory approvals.
Details
Date Published: 12/07/2018
Target: J. M. Smucker/US baking business
Country: USA
Deal Size: 375m (USD)
Sector: Food/Beverages/Tobacco
Type: Divestment
Financing: Cash
Status: Agreed
Vendor: The J. M. Smucker Company (
Buyer: Brynwood Partners VII L.P. and Brynwood Partners VIII L.P.
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