|Smucker to sell Crisco unit to B&G Foods in $550M deal|
Oct. 26, 2020 5:49 PM ET|About: The J. M. Smucker Company (SJM)|By: Carl Surran, SA News Editor
J.M. Smucker (NYSE: SJM) agrees to sell its Crisco oils and shortening business, including dedicated manufacturing and warehouse facilities located in Cincinnati, Ohio, to B&G Foods (NYSE: BGS) for $550M in cash.
BGS +6.1%, SJM +2% after-hours.
The business generated $270M in net sales for Smuckers' FY 2020 ended April 30.
Smucker says the Crisco divestiture aligns with its plan to exit the U.S. baking category and focus more of its resources on its core growth platforms of pet food, coffee and snacking.
The company expects the divestiture to be dilutive to full-year adjusted earnings by $0.45-$0.55/share, reflecting the foregone profit related to the oils and shortening business.
In a bullish analysis on B&G Foods posted earlier today on Seeking Alpha, Carles Diaz Caron cites rapidly rising sales and declining net debt as well as a safe dividend.