The J.M. Smucker Co. Announces Agreement to Divest Certain Value Brands in Continued Portfolio Optimization of Sweet Baked Snacks Segment

Core Viewpoint - The J.M. Smucker Co. has agreed to divest its Cloverhill and Big Texas brands, along with certain private label products, to JTM Foods for approximately $40 million, as part of its strategy to optimize its portfolio and focus on the Sweet Baked Snacks segment [1][2]. Group 1: Transaction Details - The transaction is an all-cash deal valued at around$40 million, subject to working capital adjustments, and includes trademarks, licenses, and a manufacturing facility in Chicago [1]. - Approximately 400 employees will transition to JTM Foods as part of the divestiture [1]. - The divested brands and private label products generated net sales of about $30 million for the fiscal year ending April 30, 2024, and are expected to generate approximately$60 million in fiscal year 2025 [2]. Group 2: Financial Impact - The divestiture is expected to have an immaterial impact on the company's adjusted earnings per share for the full year [3]. - The company plans to use the net proceeds from the transaction to pay down debt [3]. - Additional information regarding the transaction's impact will be provided when the company releases its third-quarter results [3]. Group 3: Timeline and Advisors - The transaction is anticipated to close in the fourth quarter of the current fiscal year, ending April 30, 2025 [4]. - RBC Capital Markets, LLC is serving as the financial advisor, while Benesch, Friedlander, Coplan & Aronoff LLP is the legal advisor for the transaction [4].