$5.8 Billion Pet Food Acquisition
US food group, JM Smucker Company is acquiring pet food business Big Heart Pet Brands in a cash and share transaction valued at approximately $5.8 billion, which includes approximately $2.6 billion of net debt. Big Heart Pet Brands is the largest stand-alone producer, distributor, and marketer of premium-quality, branded pet food and pet snacks in the United States. Its portfolio of brands includes Meow Mix, Milk-Bone, Kibbles ‘n Bits, 9Lives, Natural Balance and Pup-Peroni. Big Heart Pet Brands’ net sales are expected to be approximately $2.3 billion and EBITDA will be approximately $450 million for the fiscal year ending May 3, 2015.
Big Heart Pet Brands, with nearly 2,500 employees, is headquartered in San Francisco, California. The company is currently owned by a consortium of investors led by funds affiliated with Kohlberg Kravis Roberts & Co, Vestar Capital Partners, Centerview Capital and AlpInvest Partners. The company changed its name from Del Monte Corporation to Big Heart Pet Brands following the sale of its fruit, vegetable, and other consumer foods portfolio in February 2014.
The acquisition provides JM Smucker greater scale and strategic balance to its current portfolio while positioning it for continued growth.Acquiring Big Heart Pet Brands will provide JM Smucker with an immediate and significant presence in the $21 billion pet food and snacks category, one of the largest and fastest growing centre-of-the-store categories in the United States. Big Heart Pet Brands holds the number one position in pet snacks and a strong presence in the pet specialty channel, both representing key growth drivers for the overall category.
The acquisition reflects JM Smucker’s strategy of owning leading food brands in attractive centre-of-the-store categories, with a focus on North America.
Richard Smucker, chief executive of JM Smucker, comments: “With approximately two-thirds of US households having at least one family pet, we will now be able to serve the mealtime and snacking needs of the whole family. We look forward to working with Big Heart Pet Brands’ experienced and talented team to leverage our combined capabilities and scale, while further enhancing value for all our constituents.”
JM Smucker is a leading manufacturer of fruit spreads, retail packaged coffee, peanut butter, shortening and oils, ice cream toppings, sweetened condensed milk, and natural foods products in North America. Its family of brands includes Smucker’s, Folgers,Dunkin’ Donuts, Jif, Crisco and Pillsbury.
