(Bloomberg) -- JM Smucker Co. agreed to sell its Crisco shortening business to B&G Foods Inc. for $550 million in cash.
The deal includes manufacturing and warehouse facilities in Cincinnati in addition to Crisco-branded products, JM Smucker said in a statement. Crisco generated about $270 million in revenue in the fiscal year through April 30, the company said.
B&G Chief Executive Officer Kenneth G. Romanzi said “Crisco is an excellent complement to our existing portfolio of brands, including our Clabber Girl and other baking powder brands.” The deal fits with B&G's “strategy of targeting well-established brands with defensible market positions and strong cash flow at reasonable purchase price multiples,” he said in a statement.
The acquisition will be funded with cash on hand and loans under an existing credit facility, B&G said.
B&G jumped 5.4% to $29.41 after the close of regular trading in New York. JM Smucker advanced less than 1% to $115.50.
JM Smucker CEO Mark Smucker said Crisco is “an iconic brand” but didn't fit with the company's strategic priorities of pet food, coffee and snacking.
Goldman Sachs Group Inc. served as JM Smucker's financial adviser.
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