ORRVILLE, Ohio, Oct. 26, 2020 /PRNewswire/ -- The J.M.
Smucker Co. (NYSE: SJM) announced today it has entered into a
definitive agreement to sell its Crisco® oils and
shortening business to B&G Foods, Inc. in a cash transaction
valued at approximately $550 million.
The divestiture of the Crisco® business aligns
with the Company's previously stated intent to exit the U.S. baking
category and focus more of its resources on its core growth
platforms of pet food, coffee, and snacking.
The transaction encompasses oils and shortening products sold
under the Crisco® brand, certain trademarks and
licensing agreements, dedicated manufacturing and warehouse
facilities located in Cincinnati,
Ohio, and approximately 160 employees who support the
Crisco® business. The business generated net
sales of approximately $270 million
for the Company's fiscal year ended April
30, 2020, which were primarily reported in its U.S. Retail
Consumer Foods segment. The transaction also includes the Company's
oils and shortening business outside the U.S., which is primarily
in Canada.
"Crisco® is an iconic brand that is beloved by
consumers, and the business has been a solid contributor to our
financial performance," said Mark
Smucker, President and Chief Executive Officer, The J.M.
Smucker Co. "However, our strategic priorities include an increased
focus and allocation of resources toward pet food and pet snacks,
coffee, and snacking to maintain momentum in these categories.
Today's announcement helps position the Company to further grow our
core businesses and unlock value for our shareholders."
The Company expects the divestiture to be dilutive to its
adjusted earnings per share in the range of $0.45 to $0.55 on a
full-year basis, reflecting the foregone profit related to the oils
and shortening business, before factoring in any potential benefit
from the use of proceeds from the sale. The Company will further
discuss the transaction's impact on its fiscal year 2021 outlook
when it releases its second quarter results in November.
The transaction is expected to close in the third quarter of the
Company's 2021 fiscal year, subject to customary closing
conditions, including receipt of required regulatory approvals.
The Company appointed Goldman Sachs & Co. LLC as exclusive
financial advisor and Benesch, Friedlander, Coplan & Aronoff
LLP as legal advisor to assist with the sale of the
Crisco® oils and shortening business.
The J.M. Smucker Co. Forward-Looking Statements
This press release contains forward-looking statements that are
subject to risks and uncertainties that could cause actual results
to differ materially from future results expressed or implied by
those forward-looking statements. The risks, uncertainties,
important factors, and assumptions listed and discussed in this
press release, which could cause actual results to differ
materially from those expressed, include: the ability to
successfully complete a divestiture of the Company's oils and
shortening business in a timely and cost-effective manner; the
impact of the COVID-19 pandemic on the Company's business,
industry, suppliers, customers, consumers, employees, and
communities, particularly with respect to the Company's Away From
Home business; disruptions or inefficiencies in the Company's
operations or supply chain, including any impact of the COVID-19
pandemic; the ability to achieve cost savings related to cost
management programs in the amounts and within the time frames
currently anticipated; the ability to generate sufficient cash flow
to continue operating under the Company's capital deployment model,
including capital expenditures, debt repayment, dividend payments,
and share repurchases; volatility of commodity, energy, and other
input costs; risks associated with derivative and purchasing
strategies the Company employs to manage commodity pricing and
interest rate risks; the availability of reliable transportation on
acceptable terms; the ability to implement and realize the full
benefit of price changes, and the impact of the timing of the price
changes to profits and cash flow in a particular period; the
success and cost of marketing and sales programs and strategies
intended to promote growth in the Company's businesses, including
product innovation; general competitive activity in the market,
including competitors' pricing practices and promotional spending
levels; the impact of food security concerns involving either the
Company's products or its competitors' products; the impact of
accidents, extreme weather, natural disasters, and pandemics (such
as COVID-19); the concentration of certain of the Company's
businesses with key customers and suppliers, including
single-source suppliers of certain key raw materials and finished
goods, and the Company's ability to manage and maintain key
relationships; impairments in the carrying value of goodwill, other
intangible assets, or other long-lived assets or changes in useful
lives of other intangible assets or other long-lived assets; the
impact of new or changes to existing governmental laws and
regulations and their application, including tariffs; the outcome
of tax examinations, changes in tax laws, and other tax matters;
foreign currency exchange rate and interest rate fluctuations; and
risks related to other factors described under "Risk Factors" in
other reports and statements filed with the Securities and Exchange
Commission, including the Company's most recent Annual Report on
Form 10-K. The Company undertakes no obligation to update or revise
these forward-looking statements, which speak only as of the date
made, to reflect new events or circumstances.
About The J.M. Smucker Co.
Each generation of consumers leaves their mark on culture by
establishing new expectations for food and the companies that make
it. It is our privilege to be at the heart of this dynamic with a
portfolio that appeals to each generation of people and pets and is
found in 90 percent of U.S. homes and countless restaurants. This
includes a mix of iconic brands consumers have always loved such as
Folgers®, Jif® and Milk-Bone® and new favorites like
Café Bustelo®, Smucker's® Uncrustables® and Rachael Ray®
Nutrish®. By continuing to immerse ourselves in consumer and
pet parent preferences for food, how it's purchased and how the
companies that make it should operate, we will maintain the
important role we play in their lives. This will allow us to
continue growing our business and the positive impact we have on
all of those who count on us. For more information, please visit
jmsmucker.com.
The J.M. Smucker Co. is the owner of all trademarks
referenced herein except for Rachael Ray®, a
registered trademark of Ray Marks II LLC, which is used under
license.
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SOURCE The J.M. Smucker Co.