ORRVILLE, OH — The J.M. Smucker Co. announced Jan. 31 the closing of the transaction to divest its natural and organic beverage and grains businesses to Nexus Capital Management LP in a cash transaction valued at $110 million, subject to a working capital adjustment. The Company previously announced the signing of a definitive agreement on December 15, 2021.
The transaction encompasses R.W. Knudsen and TruRoots assets and trademarks, and a licensing agreement for Santa Cruz Organic beverages. The transaction also includes the Company's manufacturing and distribution facilities in Chico, CA, and Havre de Grace, MD. It does not include Santa Cruz Organic nut butters, fruit spreads, syrups or applesauce.
The divestiture supports the Company's strategy to focus resources on core brands positioned for growth. Through this approach, the Company is positioned to build on its market leadership while continuing to support the growth of the overall category.
"With the close of this transaction, we are now able to increase our focus and resources on supporting our core brands to deliver continued growth," said Tina Floyd, Senior Vice President and General Manager, Consumer Foods. "We are confident in the continued momentum of our consumer foods strategy and excited about the opportunities to build on our leadership position."
Collectively, the natural beverage and grains businesses generated net sales of approximately $140 million for the Company's fiscal year ended April 30, 2021, which were primarily reported in its U.S. Retail Consumer Foods segment.
"We are extremely excited by the opportunity to acquire the Smucker's Natural Beverage and Grains businesses," said Damian Giangiacomo, Partner at Nexus. "We believe in each of the brand's strong legacy and the ability to grow the business as an independent company in partnership with a strong management team, led Bobby Chacko as Chairman and CEO."
Chacko previously held leadership roles at Ocean Spray, Mars Inc., and The Coca-Cola Company.
"Bobby is a dynamic CPG executive with a successful track record of generating strong innovation and growth," said Daniel Flesh, Partner at Nexus. "His leadership and expertise will be critical as we develop this new plant-based consumer platform."
The J.M. Smucker Co. expects the divestiture to be dilutive to its adjusted earnings per share by approximately $0.15 on a full-year basis, reflecting the foregone profit related to the natural and organic beverages and grains businesses, before factoring in any potential benefit from the use of net proceeds from the sale. The Company will provide additional information about the transaction's impact on its fiscal year 2022 outlook when it reports its third quarter results.