Manufacturing giant The J.M. Smucker Co. is selling the majority of its pet food businesses, including several name brands and all of its private label accounts.
The Orrville, Ohio-based company has struck a deal with Post Holdings, Inc. to sell the majority of its pet food business, including the Rachael Ray Nutrish, 9Lives, Kibbles 'n Bits, Nature's Recipe, and Gravy Train brands as well as the company's private label pet food business.
The deal is valued at approximately $1.2 billion, consisting of $700 million in cash and approximately 5.39 million shares of common stock of Post Holdings, Inc. It also includes J.M. Smucker’s manufacturing and distribution facilities in Bloomsburg, Penn., as well as its manufacturing facilities in Meadville, Penn. and Lawrence, Kans.
"This divestiture supports our strategy to prioritize investments and resources in the areas of our business that offer the strongest growth and profit potential. In our pet business this is reflected in our focus on dog snacks and cat food, anchored by our Milk-Bone and Meow Mix brands, respectively," said Mark Smucker, president and CEO of The J.M. Smucker Co.. "Portfolio optimization and strategic resource allocation remain key drivers of our long-term growth. The execution of this proven strategy has helped us streamline our business, improve margin mix, and position the Company to deliver continued shareholder value."
The transaction is anticipated to close in the fourth quarter of the company's current fiscal year ending April 30, 2023, pending regulatory approval. The J.M. Smucker Co. said it expects these name brands and private labels to generate net sales of approximately $1.5 billion for the fiscal year ended April 30, 2023.