#United States #J.M. Smucker #Orrville #Cloverhill #Big Texas

J.M. Smucker Co. Streamlines Operations

In a decisive move to enhance operational efficiency, The J.M. Smucker Co. has announced its agreement to divest two of its value brands, Cloverhill and Big Texas, as well as select private label products. This strategy aligns with the company's ongoing efforts to optimize its portfolio, particularly within the Sweet Baked Snacks segment.

On January 31, 2025, J.M. Smucker confirmed a definitive agreement to transfer these brands to JTM Foods, LLC for an all-cash deal valued at approximately $40 million. This figure is subject to adjustments based on working capital. Alongside the brand names, the transaction includes pertinent trademarks, licenses, and a manufacturing facility located in Chicago, Illinois, which will also see around 400 employees transition to JTM Foods.

Dan O'Leary, the Senior Vice President and General Manager of Sweet Baked Snacks and Pet, expressed, "This divestiture reflects our continued commitment to portfolio optimization to prioritize resources to support the execution of our Sweet Baked Snacks strategy, focused on growing the Hostess® brand and advancing our leadership in the sweet baked goods category." This strategic decision highlights the company's goal to streamline its operations and reduce complexities in manufacturing while concentrating on more profitable segments.

The divested brands, along with private label items, generated an estimated $30 million in net sales during the fiscal year ending April 30, 2024. This figure reflects a partial year of sales reported since their acquisition on November 7, 2023. Projections for the fiscal year 2025 suggest full-year net sales could reach approximately $60 million from these divested brands.

Importantly, the company anticipates this divestiture will have a minimal impact on its adjusted earnings per share for the full year. The net proceeds from this transaction are expected to be utilized for debt repayment, further stabilizing the company's financial standing. Additional insights regarding this transaction's impact, which is believed to be immaterial to the fiscal year 2025 outlook, will be provided during the upcoming third-quarter results announcement.

The J.M. Smucker Co. expects the deal to close in the fourth quarter of the current fiscal year, concluding on April 30, 2025. Financial advising is being provided by RBC Capital Markets, LLC, with legal advice coming from Benesch, Friedlander, Coplan & Aronoff LLP.

As part of this announcement, J.M. Smucker also issued a cautionary note regarding forward-looking statements. These statements encompass the company's expectations and plans that extend beyond historical facts and may be influenced by various factors outside its control. As part of the safe harbor provisions under federal securities laws, the company emphasizes that outcomes may differ significantly from stated expectations.

About The J.M. Smucker Co.
J.M. Smucker Co. proudly offers a diverse array of beloved food brands across North America. Leading in various categories, including coffee, peanut butter, fruit spreads, and sweet baked goods, their product lineup features trusted names such as Folgers®, Dunkin'®, Jif®, Smucker's®, and Hostess®, among others. Committed to quality and responsible operations, the company endeavors to positively impact society while expanding its business footprint.

Overall, this strategic divestiture marks a vital step toward enhancing J.M. Smucker Co.'s focus on its core competencies in the competitive food industry.