The acquisition will help Orrville, Ohio-based J.M. Smucker – another legacy food CPG with a stable of brands including Folgers, Jif, Smucker’s Uncrustables and Smucker’s – bolster its convenient snack portfolio. "With this acquisition, we are adding an iconic sweet snacking platform, enhancing our ability to deliver brands consumers love and convenient solutions they desire, and leveraging the attributes Hostess Brands offers, including its strong convenience store distribution and leading innovation pipeline, combined with our strong commercial organization and consistent retail execution across channels to drive continued growth,” said Mark Smucker, board chair, president and CEO at J.M. Smucker. “Our organization is well positioned to deliver on the great potential our expanded family of brands offers, as has been reflected by our history of growth through acquisition and the successful integration of new categories to our business. We look forward to this exciting new chapter for The J.M. Smucker Co."
That company has been on a path to growth through change. In 2022, J.M. Smucker announced that it had created a transformation office to focus on continual improvement strategies to widen productivity initiatives and grow profits.
Meanwhile, Andy Callahan, president and CEO of the Lenexa, Kan.-based Hostess Brands, commended Hostess team members for their diligence as the company has navigated various challenges over the past several years and grew revenue by 3.5% in its most recent quarter. “Today represents another exciting chapter for Hostess Brands as we combine our iconic snacking brands with The J.M. Smucker Co.'s family of beloved brands. We believe this is the right partnership to accelerate growth and create meaningful value for consumers, customers and shareholders,” he said, underscoring the fact that the companies share complementary go-to market strategies and core business principles and operations.”
Per the agreement, J.M. Smucker will take on iconic brands including Twinkies, Donettes, DingDongs, Zingers, HoHos and Voortman cookies, among others. The company will also acquire Hostess's manufacturing facilities in Emporia, Kan., Columbus, Ga., Arkadelphia, Ark., Chicago and Indianapolis, along with another site in Ontario and a distribution center in Edgerton, Kan.
In its announcement, J.M. Smucker noted that the move enhances its financial profile, thanks to a strong cash flow, and will accelerate its growth in convenient consumer occasions. The transaction is said to encompass a net sales contribution of about $1.5 billion, with an estimated mid-single digit percentage annual growth rate.
The deal is expected to close in the third quarter of J.M. Smucker’s current fiscal year that ends April 30, 2024.