J.M. Smucker to divest Cloverhill and Big Texas brands to JTM Foods for $40M

The J.M. Smucker (SJM) Co. announced it has reached a definitive agreement to divest its Cloverhill and Big Texas brands, as well as certain private label products, to JTM Foods. The all-cash transaction is valued at approximately $40M, subject to a working capital adjustment, and includes relevant trademarks and licenses and the company’s manufacturing facility in Chicago, Illinois. Approximately 400 employees will also transition with the business. The divested value brands and private label products generated net sales of approximately $30M for the company’s fiscal year ended April 30, 2024, which represents a partial year of net sales reported in its Sweet Baked Snacks segment results following its acquisition on November 7, 2023. For fiscal year 2025, the company anticipates full-year net sales from the divested value brands and private label products to be approximately $60M. The company expects the divestiture to be immaterial to its adjusted earnings per share on a full-year basis. The company anticipates using the net proceeds from the transaction to pay down debt. The company will provide additional information about the transaction’s impact, which is expected to be immaterial to its fiscal year 2025 outlook, when it releases its third quarter results. The transaction is anticipated to close in the fourth quarter of the company’s current fiscal year ending April 30.