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J.M. Smucker Co. closed the transaction to sell its Natural Balance premium pet food business to Nexus Capital Management LP for $50 million, subject to a working capital adjustment and before a one-time cash tax benefit. 

The company previously announced the signing of a definitive agreement to divest its Natural Balance business on Dec. 3, 2020. The transaction encompasses pet food products sold under the Natural Balance brand, certain trademarks and licensing agreements and a group of employees who support the Natural Balance business.

The divestiture of the Natural Balance brand reflects the company's strategy to prioritize investments and resources toward areas of the business that will generate the greatest growth and profitability. The business generated net sales of approximately $220 million for the company's fiscal year ended April 30, 2020, which were reported in its U.S. Retail Pet Foods segment.

"The closing of this transaction supports our priority to focus on the core brands within our pet food and pet snacks portfolio, including Rachael Ray Nutrish, Milk-Bone and Meow Mix among others, which create a unique portfolio with significant long-term growth potential that meets consumer needs across value, mainstream and premium offerings," said Mark Smucker, president and chief executive officer of J.M. Smucker Co.

The company will discuss the transaction's impact on its fiscal year 2021 outlook when it releases its third quarter results and anticipates the impact on fiscal year 2021 earnings will be immaterial.