ORRVILLE, OH — The J.M. Smucker Co. will sell several pet food brands to Post Holdings Inc. in a $1.2 billion deal.
The transaction includes the Rachael Ray Nutrish, 9Lives, Kibbles ‘n Bits, Nature’s Recipe and Gravy Train brands as well as the company’s private label pet food business.
“This divestiture supports our strategy to prioritize investments and resources in the areas of our business that offer the strongest growth and profit potential,” said Mark Smucker, chairman of the board, president and CEO. “In our pet business this is reflected in our focus on dog snacks and cat food, anchored by our Milk-Bone and Meow Mix brands, respectively.”
The transaction includes relevant trademarks and licenses and Smucker’s manufacturing and distribution facilities in Bloomsburg, PA, as well as its manufacturing facilities in Meadville, PA, and Lawrence, KS. In addition, a group of employees will transition to Post Holdings, according to a press release.
Post Holdings is a consumer packaged goods holding company headquartered in St. Louis.
The deal consists of $700 million in cash and approximately 5.39 million shares of common stock of Post Holdings.
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The Company expects the divestiture to be dilutive to its adjusted earnings per share by approximately $0.45 on a full-year basis, reflecting the foregone profit related to the divested brands and before factoring in any benefits from the use of transaction proceeds and the impact of stranded overhead costs. The Company anticipates replacing the divested earnings through the deployment of transaction proceeds and mitigating the impact of stranded overhead costs through initiatives within its Transformation Office over time.
The transaction is anticipated to close in the fourth quarter of the Company’s current fiscal year ending April 30, 2023, subject to closing conditions including the receipt of required regulatory approvals. Goldman Sachs & Co., LLC is serving as the Company’s financial advisor and Wachtell, Lipton, Rosen & Katz is serving as the Company’s legal advisor in connection with the transaction.
The Company will discuss the transaction further during its prepared remarks at the Consumer Analyst Group of New York conference on Feb. 22, 2023 at 1:00 p.m. EST and when it releases its third quarter fiscal 2023 financial results on Feb. 28, 2023. The live webcasts and replays for both events can be accessed at the Company’s website: investors.jmsmucker.com.
