JM Smucker to acquire Ainsworth Pet Nutrition for US$1.9 billion

USA – JM Smucker has announced the acquisition of Ainsworth Pet Nutrition for US$1.9 billion plus an estimated tax benefit of US$200 million and considers a divestiture of its US baking business including brands like Pillsbury and Martha White.

The acquisition aims at strengthening the company’s pet food portfolio to drive growth and expand its presence in the fast-growing premium pet food category.

After the merger, JM Smucker expects US$55 million savings in operating costs in the next three years while contributing US$800m in net sales in the first full year.

Ainsworth is a US producer, distributor, and marketer of premium pet food and pet snacks under a leading brand, Rachael Ray Nutrish, covering a range of natural meats and long-lasting chews category.

According to the company, addition of Nutrish brand to its portfolio expands its cover in in the premium dry dog food segment within the grocery and mass channels, a key growth driver for the overall category.

In addition, the brand has potential to grow into the premium cat food segment and this will help strengthen position in the company’s pet food portfolio.

“Ainsworth Pet Nutrition is an excellent strategic fit for our Company, as the Rachael Ray Nutrish brand adds another high-growth, on-trend brand to our pet food portfolio,” said Mark Smucker, Chief Executive Officer.

“Their team has done a tremendous job growing this business, building Nutrish into one of the most recognizable premium pet food brands in the United States.

We look forward to working with the talented Ainsworth team, as we know their passion for pets runs as deep as ours.”

The transaction includes two manufacturing facilities owned by Ainsworth, located in Meadville, Pennsylvania and Frontenac, Kansas, and a leased distribution facility in Greenville, Pennsylvania.

As a result of the transaction, JM Smucker anticipates that over 700 Ainsworth employees will join the Company.

However, the transaction does not include two additional manufacturing facilities operated by Ainsworth and associated businesses, primarily used to provide contract manufacturing services to third-party pet food distributors.

The divestment of US baking business may include products sold in US that is key brands, along with all relevant trademarks and licensing agreements, and the Company’s manufacturing facility in Toledo, Ohio.

The company said that it’s U.S. baking brands are expected to generate net sales of approximately US$370 million for the Company’s fiscal year ending April 30, 2018.

Strategic options do not involve baking business in Canada including brands such as CarnationEagle BrandFive RosesGolden Temple, and Robin Hood.

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