ORRVILLE, Ohio, Dec. 3, 2020 /PRNewswire/ -- The J.M.
Smucker Co. (NYSE: SJM) announced today it has entered into a
definitive agreement to sell its Natural Balance®
premium pet food business to Nexus Capital Management LP, in a cash
transaction valued at approximately $50
million, subject to a working capital adjustment and before
a one-time cash tax benefit to be realized on the sale. The
transaction encompasses pet food products sold under the Natural
Balance® brand, certain trademarks and licensing
agreements, and select employees who support the Natural
Balance® business. The business generated net sales
of approximately $220 million for the
Company's fiscal year ended April 30,
2020, which were reported in its U.S. Retail Pet Foods
segment.
"The divestiture reflects our strategy to direct investments and
resources toward areas of the business that will generate the
greatest growth and profitability," said Mark Smucker, President and Chief Executive
Officer, The J.M. Smucker Co. "Today's announcement helps the
Company further focus on the core brands within our pet food and
pet snacks portfolio including Rachael
Ray® Nutrish®,
Milk-Bone® and Meow Mix® among
others, which together create a unique portfolio with significant
long-term growth potential that meets consumer needs across value,
mainstream and premium offerings."
The Company expects the divestiture to be dilutive to its
adjusted earnings per share in the range of $0.05 to $0.10 on a
full-year basis, reflecting the foregone profit related to the
Natural Balance® business, before factoring in
any potential benefit from the use of proceeds from the sale.
The Company will discuss the transaction's impact on its fiscal
year 2021 outlook when it releases its third quarter results in
February 2021 and anticipates the
earnings impact will be immaterial.
The transaction is expected to close in the third quarter of the
Company's 2021 fiscal year, subject to customary closing
conditions.
The Company appointed Goldman Sachs & Co. LLC as
financial advisor and Calfee, Halter & Griswold LLP as legal
advisor to assist with the sale of the Natural
Balance® pet food business.
The J.M. Smucker Co. 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 to
successfully complete a divestiture of the Natural
Balance® brand pet food business in a
timely and cost-effective manner; the impact of the COVID-19
pandemic on the Company's business, industry, suppliers, customers,
consumers, employees, and communities, particularly with respect to
the Company's Away From Home business; disruptions or
inefficiencies in the Company's operations or supply chain,
including any impact of the COVID-19 pandemic; the ability to
achieve cost savings related to cost management programs in the
amounts and within the time frames currently anticipated; the
ability to generate sufficient cash flow to continue operating
under the Company's capital deployment model, including capital
expenditures, debt repayment, dividend payments, and share
repurchases; volatility of commodity, energy, and other input
costs; risks associated with derivative and purchasing strategies
the Company employs to manage commodity pricing and interest rate
risks; the availability of reliable transportation on acceptable
terms, including any impact of the COVID-19 pandemic; the ability
to implement and realize the full benefit of price changes, and the
impact of the timing of the price changes to profits and cash flow
in a particular period; the success and cost of marketing and sales
programs and strategies intended to promote growth in the Company's
businesses, including product innovation; general competitive
activity in the market, including competitors' pricing practices
and promotional spending levels; the impact of food security
concerns involving either the Company's products or its
competitors' products; the impact of accidents, extreme weather,
natural disasters, and pandemics (such as COVID-19); the
concentration of certain of the Company's businesses with key
customers and suppliers, including single-source suppliers of
certain key raw materials and finished goods, and the Company's
ability to manage and maintain key relationships; impairments in
the carrying value of goodwill, other intangible assets, or other
long-lived assets or changes in useful lives of other intangible
assets or other long-lived assets; the impact of new or changes to
existing governmental laws and regulations and their application,
including tariffs; the outcome of tax examinations, changes in tax
laws, and other tax matters; foreign currency exchange rate and
interest rate fluctuations; 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.
About The J.M. Smucker Co.
Each generation of
consumers leaves their mark on culture by establishing new
expectations for food and the companies that make it. It is our
privilege to be at the heart of this dynamic with a portfolio that
appeals to each generation of people and pets and is found in 90
percent of U.S. homes and countless restaurants. This includes a
mix of iconic brands consumers have always loved such as
Folgers®, Jif® and Milk-Bone® and new favorites like
Café Bustelo®, Smucker's® Uncrustables® and Rachael Ray®
Nutrish®. By continuing to immerse ourselves in consumer and
pet parent preferences for food, how it's purchased and how the
companies that make it should operate, we will maintain the
important role we play in their lives. This will allow us to
continue growing our business and the positive impact we have on
all of those who count on us. For more information, please visit
jmsmucker.com.
The J.M. Smucker Co. is the owner of all trademarks
referenced herein except for Rachael Ray®, a
registered trademark of Ray Marks II LLC, which is used under
license.
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SOURCE The J.M. Smucker Co.