Smucker Kicks Off Bond Sale to Help Fund Hostess Acquisition

The J.M. Smucker Co. is tapping the US investment-grade bond market to help finance its acquisition of Hostess Brands Inc.

(Bloomberg) — The J.M. Smucker Co. is tapping the US investment-grade bond market to help finance its acquisition of Hostess Brands Inc.

The American food manufacturing giant, also known as Smuckers, is selling bonds in as many as four parts, according to a person with knowledge of the matter. The longest portion of the offering, a 30-year fixed-rate note, may yield around 2.05 percentage points above Treasuries, said the person, who asked not to be identified as the details are private.

Smuckers said it agreed to acquire Twinkies maker Hostess on Sept. 11 for about $5.6 billion, furthering a growing consolidation trend among companies that stock the shelf-stable aisles at the heart of supermarkets. The company was founded in 1897 by Jerome Monroe Smucker, selling homemade cider and apple butter door to door from the back of his horse-drawn wagon.

The bond sale comes a month after the company secured a $5.2 billion bridge loan provided by Bank of America Corp. and RBC Capital Markets LLC to help fund its $5.6 billion purchase of Hostess.

The Orrville, Ohio-based firm currently has about $4.3 billion in outstanding debt, largely due through 2025, according to data compiled by Bloomberg.

Bank of America Corp. and JP Morgan Chase & Co. are managing the deal, which is expected to price on Wednesday. Bloomberg is in the process of contacting J.M. Smucker for comment.

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