The deal includes brands such as Martha White, Hungry Jack and White Lily.
JM Smucker has sold its US baking business to private equity firm Brynwood Partners in a $375 million deal.
The transaction includes products sold in US retail channels under the Pillsbury, Martha White, Hungry Jack, White Lily, and Jim Dandy brands, along with all relevant trademarks and licensing agreements.
It will also see Smucker’s 650,000-square-foot manufacturing plant in Toledo, Ohio, transfer to Brynwood.
The baking unit generated net sales of approximately $370 million for Smucker’s fiscal year ended 30 April 2018. The transaction does not include the company’s baking business in Canada.
In its fourth-quarter results published last month, Smucker said it would explore a potential divestiture of the baking business, as it targets higher growth segments. The company’s retail consumer foods unit posted a 2% net sales decline for the quarter.
JM Smucker CEO Mark Smucker said: “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.
“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.”
Brynwood Partners created Hometown Food Company to acquire the assets from Smucker. The unit will be headquartered in Chicago and will operate the Toledo facility.
Brynwood Partners CEO Henk Hartong III added: “We are extremely pleased to announce the formation of the Hometown Food Company, which marks the single largest acquisition in Brynwood Partners’ 34-year history.
“We are excited to add the famous Pillsbury and Hungry Jack brands along with the White Lily, Jim Dandy and Martha White brands and their great-tasting products to our investment portfolio. The iconic portfolio of brands and the company’s strong Midwestern manufacturing footprint will provide us with a solid platform to invest in and to grow.”
The move will be complementary to Brynwood’s chocolate and confectionery manufacturer Pearson’s Candy Company, which it acquired in 2011. The firm also bought the Juicy Juice business from Nestlé in 2014.
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