Foodservice

JM Smucker to sell Crisco business to B&G Foods for $550 million

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October 27, 2020

The J.M. Smucker Co. has agreed to sell its Crisco oils and shortening business to B&G Foods, Inc. in a cash transaction valued at approximately $550 million, according to a press release. 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 business. The Crisco 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.

The company expects the divestiture to be dilutive to its adjusted earnings per share in the range of 45 cents to 55 cents 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 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.