The J.M. Smucker Co. has signed a definitive agreement to acquire the Wesson oil brand from Conagra Brands, Inc. for approximately $285 million in cash. The Wesson edible oil portfolio includes vegetable, canola, corn and blended oils.
“The addition of Wesson creates a strong complement to our Crisco brand,” said Mark T. Smucker, chief executive officer of The J.M. Smucker Co. “By allowing us to more efficiently use existing supply chain and go-to-market resources, this acquisition will lead to significant cost savings that can further fuel growth and innovation opportunities across the company.”
Conagra will continue to manufacture products sold under the Wesson brand and provide other transition services for up to one year following the close of the transaction. After the transition period, Smucker said it plans to consolidate Wesson production into its existing oils manufacturing facility in Cincinnati.
“We continue to reshape our portfolio and focus our resources on priorities that support Conagra’s business strategy and drive value creation for shareholders,” said Sean Connolly, president and c.e.o. of Conagra Brands. “We believe The J.M. Smucker Co. will be a terrific steward of the Wesson brand.”
Smucker expects the Wesson acquisition to add annual net sales of approximately $230 million. The transaction is expected to generate EBITDA of approximately $30 million and contribute approximately 10c to Smucker’s adjusted earnings per share in the first full year after closing, excluding one-time costs and before giving effect to synergies, the company said. Annual cost synergies of approximately $20 million are expected to be fully realized within two years after closing.
By Rebekah Schouten
Source: Food Business News
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