In a move that will focus its portfolio primarily on snacking, coffee, and pet food, The J.M. Smucker Company announced this week it is signing a definitive agreement to sell its U.S. baking business, which includes brands like Pillsbury®, Martha White®, Hungry Jack®, White Lily®, and Jim Dandy® as well as a manufacturing facility in Toledo, Ohio, to Brynwood Partners for $375 million.
“The divestiture reflects our strategy to further focus our portfolio and develop a stronger presence in pet food, coffee, and snacking—all large, growing categories with sustainable growth projections,” said Mark Smucker, President and Chief Executive Officer, in a press release. “Pillsbury®, Martha White®, and Hungry Jack® remain iconic brands and, although they no longer align with our strategic priorities, we are confident they will be nurtured at Brynwood. While the decision to divest these brands was difficult, it underscores our commitment to allocating resources toward those areas of the business critical to our growth.”
In a recent press release, The J.M. Smucker Company noted that it expects the divestiture to be dilutive to its adjusted earnings per share by $0.25 to $0.30 on a full-year basis, but expects the net impact to be slightly dilutive to its fiscal 2019 adjusted earnings per share. Set to close in the second quarter of the company’s 2019 fiscal year, the transaction does not include The J.M. Smucker Company’s baking business in Canada.
Will J.M. Smucker’s modified portfolio prove successful in the popular realm of snacking? Deli Market News will continue to report.