J M Smucker moves into pet food segment with $3.2bn Big Heart Pet Brands acquisition

American Food Company J M Smucker has agreed to acquire Big Heart Pet Brands in a deal worth $5.8bn.

This acquisition of Big Heart, which owns popular Meow Mix and Milk-Bone brands, is expected to provide Smucker an immediate and significant presence in the fastest growing $21bn pet food and snacks category.

It is also in-line with the company’s strategy of owning leading food brands in centre-of-the-store categories, with a focus on North America.

Smucker currently offers food products such as peanut butter, jam and Folgers coffee.

J M Smucker CEO Richard Smucker said: "The acquisition of Big Heart Pet Brands supports our purpose of ‘helping to bring families together to share memorable meals and moments’, as we recognise that pets are cherished members of the family.

"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."

The $5.8bn cash and stock transaction includes around $2.6bn of net debt. The company would pay $1.3bn in cash and provide 17.9 million shares to shareholders of Big Heart.

The transaction is expected to be completed by the end of the company’s current fiscal year, which ends on 30 April 2015.

Formerly known as Del Monte, Big Heart is the largest stand-alone producer, distributor, and marketer of premium branded pet food and pet snacks in the US.

Headquartered in San Francisco, the firm is currently owned by a consortium of investors led by funds affiliated with Kohlberg Kravis Roberts, Vestar, Centerview, and AlpInvest.

---

Image: This acquisition will help Smucker to enter the fast growing pet food and snacks category. Photo: courtesy of antpkr/ freedigitalphotos.net.