The J. M. Smucker Company to Acquire Ainsworth Pet Nutrition, LLC, Maker of Rachael Ray™ Nutrish® Pet Food; Company to Explore Strategic Options for U.S. Baking Business
- Reflects continued execution of the Company's strategic roadmap, including prioritization of key growth categories
- Ainsworth acquisition strengthens current pet food portfolio with addition of high-growth, on-trend brand
- Acquisition significantly expands presence in fast-growing premium pet food category
- Annual cost synergies of
$55 millionexpected within first three years after acquisition
Proposed Acquisition of
Ainsworth is a leading producer, distributor, and marketer of premium pet food and pet snacks, predominately within the United States. Approximately two-thirds of Ainsworth's sales are generated by its Rachael Ray™ Nutrish® brand ("Nutrish"), which is driving significant growth in the premium pet food category. Ainsworth also sells pet food and pet snacks under several additional branded and private label trademarks.
Benefits of the transaction are expected to include the following:
- Pet food and pet snacks has become the largest center-of-the-store category in the U.S. Food and Beverage market, generating over
$30 billionin annual retail sales across all channels, and remains one of the fastest-growing categories. This acquisition and the addition of the high-growth Nutrish brand will increase the scale and further accelerate the growth profile of the Company's pet food business.
- Nutrish holds a leading position and is one of the fastest-growing brands in the premium dry dog food segment within the grocery and mass channels, a key growth driver for the overall category. The addition of Nutrish to the Company's portfolio will significantly expand the Company's presence in this area, complementing the Company's Nature's Recipe® brand.
- The transaction further strengthens the Company's position in dog snacks with the presence of Nutrish in fast-growth segments, including natural meats and long-lasting chews.
- While Nutrish has a relatively smaller presence in premium cat food, the brand is well-positioned for significant growth in this segment. This will help accelerate opportunities in the Company's current pet food portfolio.
"Ainsworth Pet Nutrition is an excellent strategic fit for our Company, as the Rachael RayTM Nutrish® brand adds another high-growth, on-trend brand to our pet food portfolio," said
"Smucker's decision to acquire Ainsworth Pet Nutrition validates the power of the Ainsworth company mission," said
"After five generations, our family, in partnership with L Catterton, made the decision to sell Ainsworth Pet Nutrition to The
"It has been an important goal of mine to help create pet food with the same care I use when creating my recipes, as well as a brand that has been able to donate over
The Company anticipates the acquired business to contribute net sales of approximately
Annual cost synergies of approximately
The all-cash transaction, which the Company will fund with debt, is valued at
Ainsworth is a privately-held company headquartered in
The Company expects to incur approximately
The transaction is expected to close early in the Company's fiscal year beginning
Strategic Review of the Company's U.S. Baking Business
The Company is reviewing strategic options, including a potential divestiture, for its U.S. baking business that primarily encompasses products sold in U.S. retail channels under the
The Company's U.S. baking brands are expected to generate net sales of approximately
"We regularly review our portfolio to ensure it aligns with our strategic priorities," said
There can be no assurance that the Company's exploration of strategic options will result in any transaction or other action by the Company, or the timing thereof. The Company does not intend to comment on or provide updates regarding these matters unless and until it determines that further disclosure is appropriate or required based on then-current facts and circumstances.
The J. M. Smucker Company Forward-Looking Statements
This press release contains forward-looking statements, such as projected net sales, operating results, earnings, and cash flows that are subject to risks and uncertainties that could cause actual results to differ materially from future results expressed or implied by those forward-looking statements. The risks, uncertainties, important factors, and assumptions listed and discussed in this press release, which could cause actual results to differ materially from those expressed, include: the ability of the parties to satisfy closing conditions for the Ainsworth transaction, including receipt of required regulatory approvals, without unexpected delays or conditions; the ability to successfully integrate the acquired Ainsworth business in a timely and cost-effective manner; the ability to achieve cost efficiencies in the amounts and within the time frames currently anticipated and to effectively manage the related one-time costs; the ability of the Company to successfully complete a potential divestiture of its U.S. baking business in a timely and cost-effective manner; the ability to obtain required financing on a timely basis and on acceptable terms; the ability to maintain an investment grade credit rating; the ability to generate sufficient cash flow to meet deleveraging objectives; volatility of commodity, energy, and other input costs; risks associated with derivative and purchasing strategies employed to manage commodity pricing risks; the ability to implement and realize the full benefit of price changes that are intended to ultimately fully recover costs; general competitive activity in the market, including competitors' pricing practices and promotional spending levels; the loss of significant customers, a substantial reduction in orders from these customers, or the bankruptcy of any such customer; impairments in the carrying value of goodwill, other intangible assets, or other long-lived assets or changes in useful lives of other intangible assets; and risks related to other factors described under "Risk Factors" in other reports and statements filed with the
For 120 years, The
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The J. M. Smucker Company, (330) 682-3000; Investors: Aaron Broholm, Vice President, Investor Relations; Media: Maribeth Burns, Vice President, Corporate Communications