J.M. Smucker to Sell Voortman Cookie Brand

(Reuters) – J.M. Smucker announced on Tuesday the sale of its cookie brand, Voortman, to U.S.-based premium snacks maker Second Name Brands for $305 million in cash.

The maker of Jif peanut butter, which was exploring the sale of Voortman since July, stated that this divestiture is part of its strategy to focus on core growth brands like Cafe Bustelo and Uncrustables.

The transaction encompasses all Voortman trademarks and J.M. Smucker's leased manufacturing facility in Ontario, Canada. Around 300 employees will transition with the business.

Shares of J.M. Smucker fell about 2% during morning trading amid broader market declines.

The Dunkin' coffee maker anticipates that the divestiture will reduce the company’s adjusted earnings per share by approximately 25 cents for the full year.

The company plans to use the net proceeds from the sale to pay down debt. The deal, projected to close in the third quarter of the fiscal year ending April 30, is expected to contribute about 10 cents to Smucker's full-year earnings per share.

Packaged food companies are increasingly divesting underperforming units to focus on stronger brands as consumers shift to cheaper options instead of higher-margin products.

"The divestiture … will enable the execution of our Sweet Baked Snacks strategy through dedicated focus and ongoing investments in the Hostess brand," stated CEO Mark Smucker.

Industry peer General Mills also announced a sale of its North American yogurt business on Sept. 12.

Goldman Sachs is serving as J.M. Smucker's financial adviser on the deal.