Smucker sells Pillsbury and other baking mixes to focus on hotter sellers, like pet food

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Credit: Daniel Acker/Bloomberg News

J. M. Smucker Co. is selling its U.S. baking business to Brynwood Partners for $375 million, shedding lines the food marketer said months ago could be up for grabs as it sharpens its focus on coffee, snacks and pet food.

The deal includes baking products sold under brand names including Pillsbury, Martha White, Hungry Jack, White Lily, and Jim Dandy, plus all the relevant trademarks and licensing agreements, and a manufacturing facility in Toledo, Ohio. To be clear, Smucker's sale of the Pillsbury line doesn't include refrigerated and frozen dough, which is made by General Mills Inc. It also doesn't include Smucker's Canadian baking business.

Selling off the baking business makes sense when taking a broad look at shopping trends. In general, people are paying more attention to the coffee they drink, the snacks they eat and what they feed their pets than they are on any potential plans to make cakes and pancakes from boxed mixes sold in the sluggish center aisles of the grocery store.

"The divestiture reflects our strategy to further focus our portfolio and develop a stronger presence in pet food, coffee, and snacking—all large, growing categories with sustainable growth projections," CEO and President Mark Smucker said in a statement. "Pillsbury, Martha White, and Hungry Jack remain iconic brands and, although they no longer align with our strategic priorities, we are confident they will be nurtured at Brynwood."

Smucker has branched out well beyond fruit spreads over the years with the help of acquisitions. Among other deals, it bought the Jif and Crisco brands from Procter & Gamble in 2002 and bought P&G's Folgers coffee businesses in 2008. Pet food is becoming a bigger and bigger part of its Smucker's portfolio. In 2015, it added pet product brands including Meow Mix, Milk-Bone and Kibbles 'n Bits with the acquisition of Big Heart Pet Brands. Back in April, when Smucker announced its plan to dive deeper into pet food by buying Ainsworth Pet Nutrition, the maker of the premium Rachael Ray Nutrish line, it simultaneously said it was reviewing strategic options for the U.S. baking business, including a possible sale.

Smucker has had the baking products in its lineup since 2004 when it paid about $500 million for International Multifoods Corp. The product lines being sold to Brynwood Partners generated net sales of about $370 million in the fiscal year ended April 30. The plan to sell the lines for $375 million to Brynwood Partners VII L.P. and Brynwood Partners VIII L.P., units of Brynwood Partners, was announced Monday and is expected to close during the second quarter of Smucker's current 2019 fiscal year.

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