After months of industry speculation, The J.M. Smucker Co. announced this week that it would sell Pillsbury and its other U.S. baking brands to Greenwich, Connecticut-based Brynwood Partners in a deal valued at $375 million. The transaction primarily encompasses products sold in U.S. retail channels under the Pillsbury, Martha White, Hungry Jack, White Lily and Jim Dandy brands, along with all relevant trademarks and licensing agreements, and the company's manufacturing facility in Toledo. “The divestiture reflects our strategy to further focus our portfolio and develop a stronger presence in pet food, coffee, and snacking — all large, growing categories with sustainable growth projections," CEO Mark Smucker said. “Pillsbury, Martha White and Hungry Jack remain iconic brands and, although they no longer align with our strategic priorities, we are confident they will be nurtured at Brynwood. While the decision to divest these brands was difficult, it underscores our commitment to allocating resources toward those areas of the business critical to our growth.” The company expects the divestiture to be dilutive to its adjusted earnings per share by 25 to 30 cents on a full-year basis, reflecting foregone profit related to the U.S. baking business, before factoring in any potential benefit from the use of proceeds from the sale. However, the company expects the net impact of the divestiture to be only slightly dilutive to its fiscal 2019 adjusted earnings per share, as foregone profit for the remainder of the fiscal year is expected to be mostly offset by an anticipated one-time gain on divestiture. Smucker Co. acquired Pillsbury in 2004 with the acquisition of Minneapolis-based International Multifoods Corp. To learn more about how Smucker Co. is responding to changes in the retail food industry, read the Smart Business Akron cover story featuring Mark Smucker.
