ORRVILLE, Ohio, Jan. 29, 2021 /PRNewswire/ -- The J.M.
Smucker Co. (NYSE: SJM) announced today the closing of the
transaction to sell its Natural Balance® premium
pet food business to Nexus Capital Management LP for $50 million, subject to a working capital
adjustment and before a one-time cash tax benefit. The Company
previously announced the signing of a definitive agreement to
divest its Natural Balance® business on
December 3, 2020. The transaction
encompasses pet food products sold under the Natural
Balance® brand, certain trademarks and
licensing agreements and a group of employees who support the
Natural Balance® business.
The divestiture of the Natural Balance® brand
reflects the Company's strategy to prioritize investments
and resources toward areas of the business that will generate the
greatest growth and profitability. 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 closing of this transaction supports our priority to
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 create a unique
portfolio with significant long-term growth potential
that meets consumer needs across value,
mainstream and premium offerings," said Mark Smucker, President and Chief Executive
Officer, The J.M. Smucker Co.
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 and
anticipates the impact on fiscal year 2021 earnings will be
immaterial.
The J.M. Smucker Co. Forward-Looking Statements
This press release contains forward-looking statements 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 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; 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);
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; 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. At The J.M.
Smucker Co., it is our privilege to be at the heart of this dynamic
with a diverse portfolio that appeals to each generation of people
and pets and is found in nearly 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 preferences and
acting responsibly, we will continue growing our business and the
positive impact we have on society. 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.