ORRVILLE, Ohio, May 30, 2017 /PRNewswire/ -- The J. M.
Smucker Company (NYSE: SJM) ("Company") announced today the signing
of a definitive agreement ("Agreement") to acquire the
Wesson® oil brand from Conagra Brands, Inc.
("Conagra"). The Wesson® brand of edible
oils has been trusted by consumers for over 100 years. The
all-cash transaction, which the Company will fund primarily with
debt, is valued at approximately $285
million, prior to an expected tax benefit related to the
acquisition with a present value of approximately $45 million.
Under the terms of the Agreement, Conagra will continue to
manufacture products sold under the Wesson® brand
and provide certain other transition services for up to one year
following the close of the transaction. After the transition
period, the Company expects to consolidate
Wesson® production into its existing oils
manufacturing facility in Cincinnati,
Ohio.
The Company anticipates the acquisition to add annual net sales
of approximately $230 million.
The transaction is expected to generate earnings before interest,
taxes, depreciation, and amortization ("EBITDA") of approximately
$30 million and contribute
approximately $0.10 to the Company's
adjusted earnings per share in the first full year after closing,
excluding one-time costs and before giving effect to
synergies. Annual cost synergies of approximately
$20 million are expected to be fully
realized within two years after closing. The $285 million purchase price represents a multiple
of approximately 9.5 times EBITDA. Factoring in the estimated
$45 million tax benefit and
$20 million of annual synergies, the
multiple is expected to be approximately 5 times EBITDA.
"The addition of Wesson® creates a strong
complement to our Crisco® brand," said
Mark Smucker, Chief Executive
Officer. "By allowing us to more efficiently use existing supply
chain and go-to-market resources, this acquisition will lead to
significant cost savings that can further fuel growth and
innovation opportunities across the Company."
The transaction is subject to customary closing conditions,
including receipt of required regulatory approvals.
About The J. M. Smucker Company
For 120 years, The J.
M. Smucker Company has been committed to offering consumers quality
products that bring families together to share memorable meals and
moments. Today, Smucker is a leading marketer and manufacturer of
consumer food and beverage products and pet food and pet snacks in
North America. In consumer foods
and beverages, its brands include Smucker's®,
Folgers®, Jif®, Dunkin'
Donuts®, Crisco®,
Pillsbury®, R.W. Knudsen
Family®, Hungry Jack®, Café
Bustelo®, Martha
White®, truRoots®,
Sahale Snacks®, Robin
Hood®, and Bick's®. In pet
food and pet snacks, its brands include Meow Mix®,
Milk-Bone®, Kibbles 'n Bits®, Natural
Balance®, and 9Lives®. The Company
remains rooted in the Basic Beliefs of Quality, People,
Ethics, Growth, and Independence established by its
founder and namesake more than a century ago. For more information
about the Company, visit jmsmucker.com.
The J. M. Smucker Company is the owner of all trademarks
referenced herein, except for the following, which are used under
license: Pillsbury® is a trademark of The
Pillsbury Company, LLC, and Dunkin' Donuts® is a
registered trademark of DD IP Holder LLC.
Dunkin' Donuts® brand is licensed to The J. M.
Smucker Company for packaged coffee products sold in retail
channels such as grocery stores, mass merchandisers, club stores,
and drug stores. This information does not pertain to
Dunkin' Donuts® coffee or other products for sale
in Dunkin' Donuts® restaurants.
The J. M. Smucker Company Forward-Looking
Statements
This press release contains forward-looking
statements, such as projected net sales, operating results,
earnings, and cash flows that are subject to risks and
uncertainties that could cause actual results to differ materially
from future results expressed or implied by those forward-looking
statements. The risks, uncertainties, important factors, and
assumptions listed and discussed in this press release, which could
cause actual results to differ materially from those expressed,
include: the ability of the parties to satisfy closing conditions,
including receipt of required regulatory approvals, for the
transaction, without unexpected delays or conditions; the ability
of Conagra to meet its manufacturing and transition services
requirements during the transition period; the ability to
successfully integrate the acquired business in a timely and
cost-effective manner; the ability to achieve cost efficiencies in
the amounts and within the time frames currently anticipated and to
effectively manage the related one-time costs; the ability to
maintain an investment grade credit rating; the ability to generate
sufficient cash flow to meet deleveraging objectives; volatility of
commodity, energy, and other input costs; risks associated with
derivative and purchasing strategies employed to manage commodity
pricing risks; the ability to implement and realize the full
benefit of price changes that are intended to ultimately fully
recover costs; general competitive activity in the market,
including competitors' pricing practices and promotional spending
levels; the loss of significant customers, a substantial reduction
in orders from these customers, or the bankruptcy of any such
customer; impairments in the carrying value of goodwill, other
intangible assets, or other long-lived assets or changes in useful
lives of other intangible assets; and risks related to other
factors described under "Risk Factors" in other reports and
statements filed with the Securities and Exchange Commission,
including the Company's most recent Annual Report on Form
10-K. The Company undertakes no obligation to update or
revise these forward-looking statements, which speak only as of the
date made, to reflect new events or circumstances.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/the-j-m-smucker-company-to-acquire-the-wesson-oil-brand-from-conagra-brands-inc-300465298.html
SOURCE The J.M. Smucker Company