The J.M. Smucker Company has entered into a definitive agreement with Value Creation Partners Inc. of Columbus, Ohio, subject to regulatory approval, to sell its U.S. foodservice and bakery products businesses, as well as its Canadian locations operated under the Gourmet Baker name, acquired as part of the International Multifoods (Multifoods) acquisition.
The Multifoods foodservice and bakery products businesses consist of the manufacturing, marketing and distribution of baking mixes, frozen baked goods including muffins, cakes, doughs, as well as frostings, to restaurants, retail and wholesale bakers, and other commercial customers in the U.S. and Canada. The company expects the transaction to close by the middle of February 2005. The sale of this division will not have an impact on Smucker's remaining foodservice businesses in the U.S. and Canada.
The Smucker Company's strategy is to own and market leading North American icon brands sold in the center of the store. With the acquisition of Multifoods, the company added an exciting array of brands, which are complementary to the existing Smucker brands. However, the Multifoods foodservice and bakery products businesses acquired were not aligned with the company's existing foodservice strategy, and the decision was made in July 2004 to divest this non-strategic business segment.
For Multifoods' 2004 fiscal year ended February 28, 2004, the foodservice and bakery products businesses had net sales of $202.5 million. Since the June 18, 2004 acquisition date, the company has reported the financial results of the former Multifoods foodservice and bakery products businesses as part of its discontinued operations. The purchase price for the transaction is approximately $43 million.