B&G Foods to acquire Crisco brand
US branded food giant to pay $550 million in cash for the oils and shortening business of The J.M Smucker
US-based manufacturer B&G Foods prepares to acquire the Crisco brand of oils and shortening from The J.M. Smucker for approximately $550 million in cash. As part of the deal, B&G Foods is also acquiring a manufacturing facility and warehouse in Cincinnati, Ohio.
The J.M. Smucker manufactures jam, peanut butter, jelly, fruit syrups, beverages, shortening, ice cream toppings, oils, and other products. The company said the divestiture of the Crisco business aligns with its strategy to exit the US baking category and focus more of its resources on its core growth platforms of pet food, coffee, and snacks.
Based in Parsippany, New Jersey, B&G Foods and its subsidiaries manufacture, sell and distribute branded shelf-stable and frozen foods across the United States, Canada and Puerto Rico.
B&G Foods expects the acquisition to close before the end of this year.
“We are very excited to add the iconic Crisco brand to the B&G Foods portfolio,” said Kenneth Romanzi, chief executive of B&G Foods. “Crisco is an excellent complement to our existing portfolio of brands, including our Clabber Girl and other baking powder brands.”
Romanzi explained the acquisition is consistent with the company’s longstanding acquisition strategy of targeting well-established brands with defensible market positions and strong cash flow at reasonable purchase price multiples.
He said: “Crisco has a strong heritage, as the original all‑vegetable shortening that transformed the way people bake and cook over 100 years ago. Crisco is the number one brand of shortening, the number one brand of vegetable oil and also holds a leadership position in other cooking oils and cooking sprays.”
B&G Foods projects that next year, the acquired business will continue to benefit from increased demand due to the Covid-19 pandemic and generate annual net sales of approximately $270 million, adjusted EBITDA in the range of $65 million to $70 million and adjusted diluted earnings per share ranging $0.45 to $0.50.
The transaction is structured as an asset purchase, and B&G Foods expects to realise approximately $75 million in tax benefits on a net present value basis.
B&G Foods intends to fund the acquisition and related fees and expenses with cash on hand and revolving loans under its existing credit facility.
The J.M. Smucker appointed Goldman Sachs as exclusive financial advisor and Benesch, Friedlander, Coplan & Aronoff as legal advisor to assist with the sale.
B&G Foods operates a diverse portfolio of more than 50 brands, including Back to Nature, B&G, B&M, Cream of Wheat, Dash, Green Giant, Las Palmas, Le Sueur, Mama Mary’s, Maple Grove Farms, New York Style, Ortega, Polaner, Spice Islands and Victoria.
