US – American holding company for branded foods B&G has acquire JM Smucker’s Crisco oils and shortening business at a cost of US$550 million.
As part of the acquisition, B&G Foods is also acquiring a manufacturing facility and warehouse in Cincinnati, OH.
Certain trademarks and licensing agreements and Crisco’s oils and shortening business outside the US – which is primarily located in Canada – is also part of the deal.
The Parsippany-based company expects the acquisition to close during the fourth quarter of 2020, subject to customary closing conditions, including the receipt of regulatory approvals.
“Crisco is an excellent complement to our existing portfolio of brands, including our Clabber Girl and other baking powder brands.”
B&G Foods projects that in 2021, the acquired business will continue to benefit from increased demand due to the COVID-19 pandemic.
It estimates that the acquired business will generate annual net sales of approximately $270 million with an adjusted EBITDA in the range of $65 million to $70 million.
Because the acquisition will be structured as an asset purchase, B&G Foods also expects to realize approximately US$75 million in tax benefits on a net present value basis.
JM Smucker on its part explained that the move aligns with previously announced plans to exit the US baking category and focus on its core growth platforms of coffee, snacking and pet food.
In 2018, JM Smucker sold Pillsbury and other baking brands to private equity firm Brynwood Partners in a $375 million deal.
“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 CEO, JM Smucker.
“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.”
Crisco generated net sales of approximately US$270 million for JM Smucker’s fiscal year ended 30 April 2020.
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