A private equity firm plans to buy a smattering of brands, including the U.S. rights to Pillsbury baking products and the Funfetti brand, from the J.M. Smucker Co. for $375 million, the Connecticut-based Brynwood Partners announced Monday.
To manage those brands, Brynwood intends to create a new company, Hometown Food Co., that will be headquartered in Chicago, said Henk Hartong, chairman and CEO of Brynwood Partners. The office will employ about 40 people, said Hartong, who declined to provide an exact location for the office until the lease is finalized.
"Chicago is the center of the universe for (consumer packaged goods)," Hartong said in an interview Monday. "We want to recruit the most talented management team that we can."
The deal, which includes a 650,000-square-foot plant in Toledo, Ohio, is expected to close in the third quarter, pending regulatory approval.
The Pillsbury products being acquired, including cake and brownie mixes, and frosting, bring in about $200 million in annual revenue, Hartong said. The Funfetti brand, in particular, is an established brand with moms and young bakers and has potential for growth, he said.
Beside Pillsbury, Brynwood is also buying Hungry Jack pancake mixes, White Lily flour and cornmeal, Jim Dandy grits and Martha White cornbread among other baked good products, as part of the deal, the company said.
Once final, this will be the largest deal yet for Brynwood, which is making a name for itself as a firm that acquires lagging businesses from food companies, also known as "corporate carve-outs."
Large food companies are increasingly undertaking strategic reviews to modernize their portfolios and maximize profits, which could present more opportunities for Brynwood and other private equity firms.
