JM Smucker has sold its Cloverhill and Big Texas brands to fellow US group JTM Foods for around $40m.
As well as Cloverhill pastries and Big Texas cinnamon rolls, the deal also includes private-label products and a manufacturing facility in Chicago.
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Nearly 400 employees linked to the assets will move to JTM, a statement issued by JM Smucker said.
Dan O’Leary, the general manager of JM Smucker’s sweet baked snacks and pet-foods operations, said: “This divestiture reflects our continued commitment to portfolio optimisation to prioritise resources to support the execution of our sweet baked snacks strategy, focused on growing the Hostess brand, and advancing our leadership in the sweet baked goods category.
“This decision continues the ongoing work to ensure our manufacturing network is optimised to mitigate costs and reduce complexity.”
In November, JM Smucker divested its Voortman cookies brand to US-based snacks maker Second Nature Brands in an all-cash deal worth $305m.
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By GlobalDataThree months earlier, the group announced cut 79 jobs at its Hostess Brands’ arm, the snacks business the company acquired in a $5.6bn deal in 2023. JM Smucker attained the Cloverhill and Big Texas brands through its purchase of Hostess, which bough the assets from Aryzta in 2018.
JTM, based in Pennsylvania, makes a range of sweet baked goods, sold under its own brands and under retailers’ own labels. The company also offers co-manufacturing.
According to JM Smucker, the combined sales it generated from the assets it is selling to JTM generated nearly $30m in net sales for the fiscal year ending 30 April 2024.
JM Smucker expects the assets to bring in annual net sales of around $60m for its 2025 fiscal year.
The company plans to use the proceeds from the deal, which will have “immaterial” impact on its adjusted earnings per share, to reduce debt.
