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JM Smucker To Buy Ainsworth Pet Nutrition For $1.7 Bln

J. M. Smucker Co. (SJM) has agreed to buy Ainsworth Pet Nutrition LLC in a transaction valued at about $1.7 billion, after an estimated tax benefit of $200 million.

"Ainsworth Pet Nutrition is an excellent strategic fit for our Company, as the Rachael RayTM Nutrish brand adds another high-growth, on-trend brand to our pet food portfolio," said Mark Smucker, Chief Executive Officer. "Their team has done a tremendous job growing this business, building Nutrish into one of the most recognizable premium pet food brands in the United States."

Ainsworth is a privately-held company headquartered in Meadville, Pennsylvania. In addition to its headquarters, the transaction includes two manufacturing facilities owned by Ainsworth and a leased distribution facility. Ainsworth's 700 employees are expected to join Smucker.

Smucker expects Ainsworth's business to contribute sales of about $800 million in the first full year after closing the transaction. The business expected to contribute about $0.25 per share of accretion to the company's adjusted earnings.

Smucker plans to fund the all-cash transaction with debt. The transaction is expected to close early in the company's fiscal year beginning May 1, 2018.

Smucker also said it is reviewing strategic options, including a potential divestiture, for its U.S. baking business that includes products sold in U.S. retail channels under the Pillsbury, Martha White, Hungry Jack, White Lily, and Jim Dandy brands. The review is expected to be completed by the end of the first quarter.

"We regularly review our portfolio to ensure it aligns with our strategic priorities," said Mark Smucker. "However, our current strategic priorities include an increased emphasis and allocation of resources toward growing our coffee, pet, and snacking food businesses."

SJM closed Wednesday's trading at $123.70, up $1.98 or 1.63%, on the NYSE.

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