Smucker Selling Crisco to B&G for $550M

It follows Smucker's plan to exit the US baking market and focus more on core growth platforms.

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ORRVILLE, OH — The J.M. Smucker Co. announced Monday that 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, OH 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.

Smucker"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.

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