J. M. Smucker To Buy Big Heart Pet Brands For $5.8 Bln, Incl. Debt - Quick Facts

(RTTNews) - J. M. Smucker Co. (SJM) announced it has entered into a definitive agreement to acquire Big Heart Pet Brands in cash and stock transaction valued at approximately $5.8 billion, which includes about $2.6 billion of net debt.

Big Heart Pet Brands, which changed its name from Del Monte Corp. last year, is a stand-alone producer, distributor, and marketer of pet food and pet snacks in the United States. Big Heart Pet Brands, which has nearly 2,500 employees, is headquartered in San Francisco, California and is currently owned by a consortium of investors led by funds affiliated with Kohlberg Kravis Roberts & Co. L.P., Vestar Capital Partners, Centerview Capital and AlpInvest Partners Inc.

Under the terms of the agreement, J. M. Smucker to issue approximately 17.9 million shares to the shareholders of Big Heart Pet Brands' holding company and pay $1.3 billion in cash and also assume $2.6 billion of net debt. The transaction is expected to close by the end of current fiscal year, which ends on April 30, 2015.

J. M. Smucker expects a full year net sales contribution of approximately $2.4 billion in fiscal 2016, with an estimated annual growth rate of four to five percent over the next several years. The company further expects acquisition of Big Heart Pet Brands to be slightly accretive to its fiscal 2016 earnings per share, excluding one-time costs.

Following the closing of the transaction, the company will have approximately 120 million common shares outstanding, of which approximately 14 percent will be owned by KKR, Vestar, Centerview, and AlpInvest.