J. M. Smucker said pre-market Tuesday it has agreed to acquire the Wesson oil brand from Conagra Brands (CAG). The Wesson brand of edible oils has been trusted by consumers for over 100 years. The all-cash deal, which J. M. Smucker will fund primarily with debt, is valued at $285 million, prior to an expected tax benefit related to the acquisition with a present value of $45 million.
Conagra will continue to manufacture products sold under the Wesson brand and provide certain other transition services for up to one year following the close of the deal. After the transition period, J. M. Smucker expects to consolidate Wesson production into its existing oils manufacturing facility in Cincinnati, Ohio. J. M. Smucker anticipates the acquisition to add annual net sales of $230 million. The deal is expected to generate earnings before interest, tax, depreciation and amortization (EBITDA) of $30 million and contribute $0.10 to the company’s adjusted earnings per share in the first full year after closing.