Unboxing the deal
Uncovering
value creation
The J.M. Smucker Co. stands as a major player in the North American food and beverage industry. A 127-year-old company with a storied history, they have remained a leading brand by continually exploring opportunities for growth.
RBC Capital Markets worked with Smucker to help identify an opportunity in the rapidly expanding snacking category, advising Smucker on Hostess Brands, the owner of iconic treats like Twinkies and Donettes. The client participated in a spirited, intensive bidding process and was able to successfully acquire the Company.
The result is a compelling opportunity for Smucker value creation. Hostess offers a complementary go-to-market strategy and product adding to Smucker’s portfolio of iconic, scaled brands.
Accelerating
strategic support
As lead financial advisor, RBC expeditiously provided comfort regarding the financing of the transaction to allow Smucker the flexibility to support the purchase in an acceptable structure to Hostess Brands. RBC’s rating agency experts worked with Smucker to optimize the capital structure.
The end result allowed Smucker to prevail in the competitive process, while maintaining a strong investment grade rating and a robust financial profile.
The strong cash flow of the combined business should now enable rapid deleveraging and ongoing investment in the business which has broad potential.
“The addition of Hostess strengthens our financial profile, as it will contribute strong top-line growth, be accretive to margins and earnings, and provide significant synergy opportunities.”
Mark Smucker,
President and Chief Executive Officer,
J.M. Smucker
Executing
for success
As a trusted advisor, RBC brought together disciplines across the advisory and financing capabilities of the bank in a manner that was confidential, swift and relevant to the highly contested asset.
In sensitive and competitive bidding conditions, RBC helped Smucker meet the requirements of Hostess and maintained confidentiality during the sale process in a manner that allowed the client to meet an ambitious timetable and achieve its desired outcome.
The leadership team accelerated full support of the acquisition, leveraging RBC’s senior deal team’s deep experience in large-scale corporate M&A as well as industry and market expertise.
Sources
All transaction details and forward looking statements sourced from the following press announcement.