US-based manufacturer B&G Foods is set to acquire the Crisco cooking oil and bakery shortening brand and an associated manufacturing facility from food and drink company JM Smucker, the companies announced on 26 October.
B&G Foods said it expected the US$550M cash transaction to close during the fourth quarter of 2020, subject to customary closing conditions, including regulatory approvals.
Crisco’s product line-up includes vegetable shortening, vegetable oil and other cooking oils, and sprays. The transaction also includes the company’s oils and shortening business outside the USA, which is primarily in Canada.
“This acquisition is consistent with our longstanding acquisition strategy of targeting well-established brands with defensible market positions and strong cash flow at reasonable purchase price multiples,” said Kenneth G Romanzi, president and chief executive officer of B&G Foods.
B&G Foods, the owner of brands including Green Giant frozen vegetables and the Ortega range of taco sauce and other Mexican foods, projected the Crisco brand would generate sales next year of around US$270M against a backdrop of increased demand due to COVID-19, which was leading to more people eating at home.
Earlier this year, B&G also acquired Massachusetts-based vegan manufacturer Farmwise, and in May 2019 it purchased baking product manufacturer Clabber Girl.
JM Smucker said the divestiture of the Crisco business was in line with the company’s intention to exit the US baking category and focus more on its core growth areas of pet food, coffee and snacks.
New Jersey-based B&G Foods and its subsidiaries manufacture, sell and distribute branded packaged and frozen foods across the USA, Canada and Puerto Rico.
Ohio-headquartered JM Smucker owns and operates manufacturing facilities and offices across North America.